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A casting company is considering the replacement analysis of a furnace. If it is bought...

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Accounting

A casting company is considering the replacement analysis of a furnace. If it is bought from A factory, annual operating and maintenance costs will
be 50.000 TL/year. It can be kept for 10 years. The purchase cost is 300.000 TL. The scrap value is 15.000 TL. If the furnace is bought from the B
factory, the annual operating and maintenance cost will be 30.000 TL/year. Economical life of this machine is 5 years. The purchase cost is 250.000
TL and the Scrap Value is 25.000 TL. Capital cost is 25% for two factories.
Based on these data, what will be the future value (FV) of the annual operating expense of alternative B?
A)597.583
B)797.183
C)397.122
D)667.154
E)997.583
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