The replacement of a laser cutting machine is being considered. The best available machine on market has an estimated economic life of 12 years with an equivalent annual worth ofS-22,800. The current used machine, which was bought three years ago for $36, 000, has a present market value of 54,000 with the following data for the next three years:Estimated Market ValueYearS per Yearat End of Year., S20,0003,00025.0002,500330.0002.000Select when to replace the machine, using Economic Service Life method at an interest rate of 4% per year,O Replace nowO Replace in year oneO Replace in year twoO Replace in year three

Given: Annual cost of current machine = 36,000 Interest Rate = 4% Operating Cost = 20,000 Salvage…

The replacement of a laser cutting machine is being considered. The best available machine on market has an estimated economic life of 12 years with an equivalent annual worth of S-22,800. The current used machine, which was bought three years ago for $36,000, has a present market value of $4,000 with the following data for the next three years: oC Estimated Market Value Year S per Year at End of Year, $ 1 20,000 3,000 2 25,000 2,500 30,000 2,000 Select when to replace the machine, using Economic Service Life method at an interest rate of 4% per year, O Replace now O Replace in year one O Replace in year two O Replace in year three

The replacement of a laser cutting machine is being considered. The best available machine on market has an estimated economic life of 12 years with an equivalent annual worth of S-22,800. The current used machine, which was bought three years ago for $36,000, has a present market value of $4,000 with the following data for the next three years: oC Estimated Market Value Year S per Year at End of Year, $ 1 20,000 3,000 2 25,000 2,500 30,000 2,000 Select when to replace the machine, using Economic Service Life method at an interest rate of 4% per year, O Replace now O Replace in year one O Replace in year two O Replace in year three

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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