A machine tool company has a production machine with a trade in value of $10,200. The company will not keep the machine more than 3 more years. The costs associated with the machine are shown in the table below:
Year AOC SV
1 $35,000 $8,300
2 $37,000 $6,500
3 $30,000 $7,200
At the beginning of year 3, the company would be required to spend$5,200for an upgrade in order to keep the machine for year 3. The company can acquire a new machine for$38,000with a7year economic life,$9,100 salvage value after 7 years and an AOC of$20,000with a$2,000per year increasing gradient. The Company's MARR is 12% per year.( note you must use "one year at a time". Solution with. Flow chart). Determine when the company should replace the machine