Question

9-34 & 9-35 Machine A was purchased three years ago for
$10,000 and had an estimated MV of $1,000 at the end of its 10-year
life. Annual operating costs are $1,000. The machine will perform
satisfactorily for the next seven years. A salesperson for another
company is offering Machine B for $50,000 with an MV of $5,000
after 10 years. Annual operating costs will be $600. Machine A
could be sold now for $7,000, and MARR is 12%per year.

Use this information to answer Problems 9-34 and 9-35

9-34.Using the outsider viewpoint, what is the EUAC of
continuing to use Machine A ? Choose the closest answer (9.6)

(a) $1,000 (b) $2,182 (c) $2,713 (d) $901 (e) $2,435

9-35.Using the outsider viewpoint, what is the EUAC of buying
Machine B? Choose the closest answer.(9.5)

(a) $8,565 (b) $11,361 (c) $9,750 (d) $9,165 (e) $900

Answer #1

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Replacement Analysis BTCF
Machine A was purchased three years ago for $12,000 and had an
estimated market value
of $1,000 at the end of its 10-year life. Annual operating costs
are $1,500. The machine will perform satisfactorily for the next
seven years. A salesman for another company is offering machine B
for $60,000 with a market value of $5,000 after 10 years. Annual
operating costs will be $800. Machine A could be sold now for
$8,000, and the MARR is...

Replacement Analysis BTCF Machine A was purchased three years
ago for $12,000 and had an estimated market value of $1,000 at the
end of its 10-year life. Annual operating costs are $1,500. The
machine will perform satisfactorily for the next seven years. A
salesman for another company is offering machine B for $60,000 with
a market value of $5,000 after 10 years. Annual operating costs
will be $800. Machine A could be sold now for $8,000, and the MARR
is...

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for $20,000 at the end of its useful life.
A new high-efficiency digital-controlled flange-lipper can be
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flange-lippers are robust and useful machines, this one can be sold
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Problem 11-13
Replacement Analysis
The Everly Equipment Company's flange-lipping machine was
purchased 5 years ago for $80,000. It had an expected life of 10
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flange-lippers are robust and useful machines, this one can be sold
for $20,000 at the end of its useful life.
A new high-efficiency digital-controlled flange-lipper can be
purchased for $130,000, including installation costs. During...

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