Purchase of a new high-efficiency machine

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Reference no: EM131810526

You are considering the purchase of a new high-efficiency machine to replace older machines now. The new machine can replace four of the older machines, each with a current market value of $600. The new machine will cost $5000 and will save the equivalent of 10,000 kWh of electricity per year. After a period of 10 years, neither option (new or old) will have any market value. If you use a beforetax MARR of 25% and pay $0.075 per kilowatthour, would you replace the old machines today with the new one?

Reference no: EM131810526

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