Review given problem related to machine

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Question: State University must choose between two new snow-removal machines. The Son-Blower has a $60,000 first cost, a 20-year life, and a $5000 salvage value. At the end of 9 years, the machine requires a major overhaul costing $14,000. Annual maintenance and operating costs are $8000. The Snooker will cost $40,000, has an expected life of 10 years, and has no salvage value. The annual maintenance and operating costs are expected to be $10,000. Using a 12% interest rate, which machine should be chosen?

Reference no: EM132165327

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