Reference no: EM13606327

The Lansing Community College registrar's office is considering replacing some Canon copiers with faster copiers purchased from Kodak. The office's 4 Canon machines are expected to last 4 more years. They can each be sold immediately for $800; their resale value in 4 years will be zero. The total cost of the new Kodak equipment will be $120,000; the equipment will have a life of 4 years and a total disposal value at that time of $1,900. The 4 Canon operators are paid $7.70 an hour each. They work a 39-hour week and 52 weeks a year. The machines break down periodically, resulting in annual repair costs of $1,260 for each machine. Supplies cost $960 a year for each Canon copier. The Kodak system will require only 3 regular operators. Kodak has offered the college a maintenance contract that covers all machine breakdowns; the cost of the contract is $840 per year. Total cost for all supplies will be $300 per month. What is the annual recurring cash flow if Lansing keeps the Canon copiers? What is the annual recurring cash flow if Lansing buys the Kodak copiers? Assuming a discount rate of 4%, what is the net present value if Lansing keeps the Canon copiers? What is the annual recurring cash flow if Lansing buys the Kodak copiers?