PROBLEM2 A machine needed in silver refining operation was purchased 7 years ago for $160,000....
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PROBLEM2 A machine needed in silver refining operation was purchased 7 years ago for $160,000. Last year a replacement study was performed with the decision to retain it for 3 more years. The situation now has changed. The equipment is estimated to have a salvage value of $12,000 anytime in the future. If kept in service, it can be minimally upgraded at a cost of $51,000 to make it usable for up to 3 more years. Its operating cost is estimated at $25,000 the first year and $30,000 the second year. Alternatively, the company can purchase a new system that will have and equivalent annual worth if $50,063 per year over its ESL. The company uses a MARR of 10% per year. Use annual worth analysis to determine when the company should replace the machine
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