A company is considering replacing a machine that was bought six years ago for $
ID: 1192756 • Letter: A
Question
A company is considering replacing a machine that was bought six years ago for $50,000. The machine, however, can be repaired and its life extended by five more years. If the current machine is replaced, the new machine will cost $44,000 and will reduce the operating expenses by $6,000 pe year. The seller of the new machine has offered a trade-in allowance of $15,000 for the old machine. If MARR is 12% per year before taxes, how much can the company spend to repair the existing machine?
$22,371
$7,371
-$1,000
$50,628
Explanation / Answer
-$1,000
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