What is the maximum that should be paid to replace machine

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Problem 1: A machine being currently used costs $8,000 annually to run. What is the maximum that should be paid to replace the machine with one that will last four years and cost only $3,000 annually to run? The opportunity cost of capital is 10 percent.

Option 1: 13,500.78
Option 2: $14,550.87
Option 3: $16,854.66
Option 4: $15,849.33

Reference no: EM132952654

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