Hi all, Please list all steps!! Hayden Inc. has a number of copiers that were bought four years...

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Finance

Hi all,
Please list all steps!!
Hayden Inc. has anumber of copiers that were bought four years ago for $26,000.Currently maintenance costs $2,600 a year, but the maintenanceagreement expires at the end of two years and thereafter the annualmaintenance charge will rise to $8,600. The machines have a currentresale value of $8,600, but at the end of year 2 their value willhave fallen to $4,100. By the end of year 6 the machines will bevalueless and would be scrapped.
Hayden is consideringreplacing the copiers with new machines that would do essentiallythe same job. These machines cost $31,000, and the company can takeout an eight-year maintenance contract for $1,400 a year. Themachines will have no value by the end of the eight years and willbe scrapped.
Both machines aredepreciated by using seven-year MACRS, and the tax rate is 40%.Assume for simplicity that the inflation rate is zero. The realcost of capital is 9%.
a.Calculate the equivalent annual cost, if the copiers are: (i)replaced now, (ii) replaced two years from now, or (iii) replacedsix years from now. (Do not round intermediatecalculations. Enter your answers as a positive value rounded to 2decimal places.)
Equivalent Annual Cost
(i) Replacednow $
(ii) Replacedtwo years from now $
(iii) Replacedsix years from now $
b.When should Hayden replace its copiers?
Replace in twoyears
Replace now
Replace after sixyears

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Hi all,Please list all steps!!Hayden Inc. has anumber of copiers that were bought four years ago for $26,000.Currently maintenance costs $2,600 a year, but the maintenanceagreement expires at the end of two years and thereafter the annualmaintenance charge will rise to $8,600. The machines have a currentresale value of $8,600, but at the end of year 2 their value willhave fallen to $4,100. By the end of year 6 the machines will bevalueless and would be scrapped.Hayden is consideringreplacing the copiers with new machines that would do essentiallythe same job. These machines cost $31,000, and the company can takeout an eight-year maintenance contract for $1,400 a year. Themachines will have no value by the end of the eight years and willbe scrapped.Both machines aredepreciated by using seven-year MACRS, and the tax rate is 40%.Assume for simplicity that the inflation rate is zero. The realcost of capital is 9%.a.Calculate the equivalent annual cost, if the copiers are: (i)replaced now, (ii) replaced two years from now, or (iii) replacedsix years from now. (Do not round intermediatecalculations. Enter your answers as a positive value rounded to 2decimal places.)Equivalent Annual Cost(i) Replacednow$(ii) Replacedtwo years from now$(iii) Replacedsix years from now$b.When should Hayden replace its copiers?Replace in twoyearsReplace nowReplace after sixyears

		Equivalent Annual Cost
(i) Replacednow	$
(ii) Replacedtwo years from now	$
(iii) Replacedsix years from now	$