Problem
A machine that has been used for one year has a salvage value of $10,000 now, which will drop by $2000 per year. The maintenance costs for the next 4 years are $1250, $1450, $1750, and $2250. Determine the marginal cost to extend service for each of the next 4 years if the MARR is 8%. 13-9 A drill press was purchased 2 years ago for $40,000. The press can be sold for $15,000 today, or for $12,000, $10,000, $8000, $6000, $4000, or $2000 at the ends of each of the next 6 years. The annual operating and maintenance cost for the next 6 years will be $2700, $2900, $3300, $3700, $4200, and $4700. Determine the marginal cost to extend service for each of the next 6 years if the MARR is 12%. If a new drill press has an EAC of $7000, when should the drill press be replaced?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.