An £80,000 machine to manufacture recycled paper was purchased by the XYZ company two years ago. The current Market Value of the machine is £50,000 and it can be kept in service for seven more years....


An £80,000 machine to manufacture recycled paper was purchased by the XYZ company<br>two years ago. The current Market Value of the machine is £50,000 and it can be kept in<br>service for seven more years. MARR is 12% per year and the projected net annual receipts<br>(revenue less expenses) and end-of-year market values for the machine are shown below.<br>When is the best time for the company to abandon this machine?<br>End of Year<br>1<br>2<br>3<br>4<br>5<br>6.<br>7<br>£3,000<br>£5,000<br>Net annual receipts<br>£20,000 £20,000 £18,000 £15,000 £12,000<br>£6,000<br>Market Value<br>£40,000 £32,000 £25,000 £20,000 £15,000 £10,000<br>

Extracted text: An £80,000 machine to manufacture recycled paper was purchased by the XYZ company two years ago. The current Market Value of the machine is £50,000 and it can be kept in service for seven more years. MARR is 12% per year and the projected net annual receipts (revenue less expenses) and end-of-year market values for the machine are shown below. When is the best time for the company to abandon this machine? End of Year 1 2 3 4 5 6. 7 £3,000 £5,000 Net annual receipts £20,000 £20,000 £18,000 £15,000 £12,000 £6,000 Market Value £40,000 £32,000 £25,000 £20,000 £15,000 £10,000

Jun 10, 2022
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