Incremental net present value = Present value of operating cost saving at 6%, 4 years + Present value of salvage value of old machine at 6%, 4th years - Net cash outflow
= (64000-47000)*3.4651 + 1000*0.7921 - (69000-7000)
= $-2,301.20
X Company is considering replacing one of its machines in order to save operating costs. Operating...
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $67,000 per year; operating costs with the new machine are expected to be $45,000 per year. The new machine will cost $ 70,000 and will last for four years, at which time it can be sold for $3,000. The current machine will also last for four more years but will not be worth anything at that time. It...
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $65,000 per year; operating costs with the new machine are expected to be $50,000 per year. The new machine will cost $69,000 and will last for four years, at which time it can be sold for $3,000. The current machine will also last for four more years but will not be worth anything at that time. It cost...
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $64,000 per year; operating costs with the new machine are expected to be $49,000 per year. The new machine will cost $74,000 and will last for four years, at which time it can be sold for $2,000. The current machine will also last for four more years but will not be worth anything at that time. It cost...
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $66,000 per year; operating costs with the new machine are expected to be $46,000 per year. The new machine will cost $75,000 and will last for six years, at which time it can be sold for $3,000. The current machine will also last for six more years but will not be worth anything at that time. It cost...
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $70,000 per year; operating costs with the new machine are expected to be $47,000 per year. The new machine will cost $65,000 and will last for six years, at which time it can be sold for $3,000. The current machine will also last for six more years but will not be worth anything at that time. It cost...
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $67,000 per year; operating costs with the new machine are expected to be $50,000 per year. The new machine will cost $70,000 and will last for four years, at which time it can be sold for $1,000. The current machine will also last for four more years but will not be worth anything at that time. It cost...
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $64,000 per year; operating costs with the new machine are expected to be $40,000 per year. The new machine will cost $73,000 and will last for six years, at which time it can be sold for $2,000. The current machine will also last for six more years but will not be worth anything at that time. It cost...
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $64,000 per year; operating costs with the new machine are expected to be $40,000 per year. The new machine will cost $73,000 and will last for six years, at which time it can be sold for $2,000. The current machine will also last for six more years but will not be worth anything at that time. It cost...
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $61,000 per year; operating costs with the new machine are expected to be $43,000 per year. The new machine will cost $72,000 and will last for six years, at which time it can be sold for $2,500. The current machine will also last for six more years but will not be worth anything at that time. It cost...
X Company is considering replacing one of its machines in order to save operating costs. Operating costs with the current machine are $61,000 per year; operating costs with the new machine are expected to be $42,000 per year. The new machine will cost $72,000 and will last for six years, at which time it can be sold for $1,500. The current machine will also last for six more years but will not be worth anything at that time. It cost...