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Acme Ice Cream Company is investigating the purchase of a new mixing machine. The machine itself costs $40,000, and the Acme's engineers have planned machine overhauls every 3 years for the next 12 years with each overhaul costing $4,000. Acme believes this new mixing machine will allow increased sales revenue of $25,000 per year over the life of the machine. Acme's MARR is 10% per year. Assuming that the company performs the overhaul in the 12th year, answer the following questions:

? What is the overall value of the project in the present?

? What is the annual value of the project?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91733900

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