courtcastro24
Nov 23, 2013, 07:46 PM
Keep the old machine and have it overhauled. If the old machine is overhauled, it will be kept for another three years and then sold for its salvage value.
Cost of old machine $109,000
Cost of overhaul 148,000
Annual expected revenues generated 105,000
Annual cash operating costs after overhaul 33,000
Salvage value of old machine in 3 years 11,000
Cost of old machine $109,000
Cost of overhaul 148,000
Annual expected revenues generated 105,000
Annual cash operating costs after overhaul 33,000
Salvage value of old machine in 3 years 11,000