A milling machine with enhanced CNC controls that allow for high-speed machining of free-form parts was purchased 2 years ago for $195,000. The company wants to purchase a recently available faster model with control up to 8 axes for $240,000. The presently owned machine can be sold today for $105,000. Its operating cost over the past 2 years has been $30,000 per year. The value that should be used as P for the presently owned machine is: (a) $240,000 (b) $195,000 (c) $105,000 (d ) $30,000

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

A milling machine with enhanced CNC controls
that allow for high-speed machining of free-form
parts was purchased 2 years ago for $195,000. The
company wants to purchase a recently available
faster model with control up to 8 axes for $240,000.
The presently owned machine can be sold today
for $105,000. Its operating cost over the past 2
years has been $30,000 per year. The value that
should be used as P for the presently owned machine
is:
(a) $240,000 (b) $195,000
(c) $105,000 (d ) $30,000

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Probability and Expected Value
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education