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Replacing an asset

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solution


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Question;Four years ago a company;purchased a new copy machine. Due to deterioration, soon a new copy machine;will be needed. The annual maintenance cost for the existing machine is $1,600;and increasing 100 each year. An identical copy machine can be purchased now to;replace the presently owned assets. The presently owned copy machine losses;each year $10,000 in resale value, compare the assets with at 10% per year and;compute when the presently owed should be replace.;Same;model as presently owned;Present value (when new);$75,000;Present value of new copy machine;$85,000;Annual;cost (old copy machine) 1,100;Annual;cost (new copy machine) 1,600 and increasing;Salvage;value (both machine) 15,000;Life;in years (both machine) 6

 

Paper#56186 | Written in 18-Jul-2015

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