What is the difference in the equivalent uniform annual cost

Reference no: EM13684322

Machine A was purchased three years ago for $10,000 and had an estimated market value of $1,200 at the end of its 10-year life. Annual operating costs are $1,100. The machine will perform satisfactorily for the next seven years. A salesman for another company is offering Machine B for $52,000 with a market value of $5,200 after ten years. Annual operating costs will be $700. Machine A could be sold now for $9,000, and MARR is 16 percent 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).

Reference no: EM13684322

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