Determine the marginal cost to extend service

Reference no: EM132165647

Question - A drill press was purchased 2 years ago for $40,000. The press can be sold for $15,000 today or for $12,000, $10,000, $8000, $6000, $4000, or $2000 at the ends of each of the next 6 years. The annual operating and maintenance cost for the next 6 years will be $2700, $2900, $3300, $3700, $4200, and $4700. Determine the marginal cost to extend service for each of the next 6 years if the MARR is 12%. If a new drill press has an EAC of $7000, when should the drill press be replaced?

Reference no: EM132165647

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