In: Finance
A drill press is purchased for $12,000. It is anticipated that its market value at the end of any year will be 18% less than its market value at the end of that year. In other words, its market value is reduced by 18% each year. The repair costs are covered by the warranty in Year 1. However, the repair cost in Year 2 is $500 and increases by $500 each year. This machining company has an MARR of 15%. State here on Blackboard the minimum EUAC (to the closest penny) of this drill press and its economic life (in years).
Please refer to below spreadsheet for calculation and answer. Cell reference also provided.
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