The ABC Corporation is considering the purchase of a new bottling machine for its wine bottling...

The ABC Corporation is considering the purchase of a new bottling machine for its wine bottling line. The bottling machine will cost $30,500. The maintenance and operating costs will amount to $1,300 for the first year. The maintenance and operating costs can be expected to increase $3,000 for each year that the bottling machine is used. The salvage value of the bottling machine, at any time that it is removed from service, will be the bottling machine's scrap value ($1,000). The annual income that will result from the use of the new bottling machine is expected to be $15,000. ABC uses a before-tax MARR of 12%. What is the economic life of the bottling machine?

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Rahul Sunny answered 1 year ago

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