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Machine A was purchased three years ago for $10,000 and had an estimated market value of $1,500 at the end of its 10-year life. Annual operating costs are $1,250. The machine will perform satisfactorily for the next seven years. A salesman for another company is offering Machine B for $55,000 with an market value of $5,500 after 10 years. Annual operating costs will be $850. Machine A could be sold now for $12,000, and MARR is 29% per year. Using the outsider viewpoint, what is the difference in the equivalent uniform annual cost (EUAC) of buying Machine B compared to continuing to use Machine A; i.e., EUAC(Machine B) – EUAC(Machine A).

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91402572

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