suppose we are thinking about replacing an old computer with a new one. the old one...

suppose we are thinking about replacing an old computer with a new one. the old one cost $1,800.000; the new one will cost, $2183.000. the new machine will be depreciated straigth line to zero over its five year life. it will probably be worth about $540.000 after five years. the old computer is being depreciated at a rate of $408.000 per year. it will be completely written off in three years. if we dont replace it now, we will have to replace it in two years. we can sell it now for 612000; in two years it will probably be worth $180000. the new machine will save us $359000 per year in operating costs. the tax rate is 22 percent and the discount rate is 9 percent. a. calculate the EAC for the old computer and the new computer. a2. what is the NPV of the decision to replace the computer now?

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jeff jeffy answered 10 months ago

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suppose we are thinking about replacing an old computer with a new one. the old one...

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