Until this two alternative become equivalent

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It is estimated that the annual sale of a system in the first 2 years is 1000 and 1800 units respectively. To produce this device, there are two alternatives: alternative A is to purchase a machine costing $10,000. Alternative B is to purchase a machine costing $15,000 with the estimated salvage value of $1,000 at the end of 2 years. The variable manufacturing cost per unit is $5 and $2 for the machines in alternative A and B respectively. If the interest rate is 10%, what should be the salvage value of the machine in alternative A, until this two alternative become equivalent.

Reference no: EM131870470

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