A presently owned machine (Defender) has a useful life of 3 more years. Annual worth calculations for 1, 2, and 3 years are made and the following results are obtained. AW 1 = $ 42,400 AW 2 = $44,590...


A presently owned machine (Defender) has a useful life of 3 more years. Annual worth calculations for 1, 2, and 3 years are made and the following results are obtained.


AW1
= $ 42,400


AW2= $44,590


AW3
= $47,356


A new improved machine (Challenger) that can be purchased will have a maximum useful life of 4 years. Annual worth calculations for 1, 2, 3, and 4 years yield the following results.


AW1
= $85,000


AW2 =
$53,571


AW3
= $43,127


AW4 =
$37,928


when should the presently owned machine (Defender) be replaced?


Select one:


a. Replace now


b. Replace 1 year later


c. Replace 3 years later


d. Replace 4 years later


e. Replace 2 years later



Jun 04, 2022
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