Difference between replacement cost and the salvage value

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Reference no: EM131957876

In 15 years, a $18000 machine is expected to be worth $4000. A new machine at that time is expected to sell for $25000. In order to provide funds for the difference between the replacement cost and the salvage value, a sinking fund is set up into which equal payments are placed at the end of each year. If the fund earns 5.9% compounded annually, how much should each payment be?

Reference no: EM131957876

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