With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine...
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With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equal to that of machine Y at an interest rate of 11% per year. Determine the replacement value.
| Machine X | Machine Y | |
| Market Value, $ | ? | 92,000 |
| Annual Cost, $ per Year | ?60,000 | ?40,000 for year 1,increasing by 2000 per year thereafter. |
| Salvage Value | 11,500 | 16,000 |
| Life, Years | 3 | 5 |
The replacement value is $ .
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