Question: You need a lathe for your machine shop for 10 years. You narrowed down to two models: Kendall and Toyota. You also collected the financial

You need a lathe for your machine shop for 10 years. You narrowed down to two models: Kendall and Toyota. You also collected the financial data given in Table P5.50.
If your interest rate is 12%, what should be the salvage value of the Toyota model at the end of 10 years so that you would be indifferent between the two models?

First Cost Annual O&M Costs Useful Life Salvage Value Kendall $25,000 $11,000 10 years $3,000 Toyota $32,000 $9,700 14 years $2,000

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