Uses digitally controlled dyer for placing intricate

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Milliken uses a digitally controlled “dyer” for placing intricate and integrated patterns on manufactured carpet squares for home and commercial use. It is purchased for $400,000. Its market value will be $310,000 at the end of the first year and drop by $40,000 per year thereafter to a minimum of $30,000. Operating costs are $20,000 the first year, increasing by 8% per year. Maintenance costs are only $8,000 the first year but will increase by 35% each year thereafter. Milliken's MARR is 20%. Determine the optimum replacement interval for the dyer.

Reference no: EM131094460

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