The company should keep or place the defender at marr

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Reference no: EM132040449

A piece of imaging equipment was purchased 2 years ago for $50,000 with an expected useful life 5 years and a $50,000 salvage Value. Since its installation performance was poor it was upgraded for $20,000 1 year ago. Increased demand now requires another upgrade for an additional $22,000 so that it can be used for 3 more years. Its new annual operating costs will be $27,000 with the $12,000 salvage after the 3 years. Alternatively it can be replaced with new equipment costing $65,000, Operating Costs of $14,000 per year and an expected salvage of $23,000 after 3 years. If replaced now the existing equipment will be sold for $7000. Determine whether the company should keep or a place the defender at a MARR of 10% per year.

Reference no: EM132040449

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