Question

# 9-34 & 9-35 Machine A was purchased three years ago for \$10,000 and had an estimated...

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

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