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National Chemicals has an automatic chemical mixture that it has been using for the past 4 years....

National Chemicals has an automatic chemical mixture that it has been using for the past 4 years. The mixer originally cost $Please explain well with numbers why you came to the conclusion.

National Chemicals has an automatic chemical mixture that it has been using for the past 4 years. The mixer originally cost $18,000. Today the mixer can be sold for $10,000. The mixer can be used for 10 years more and will have a $2,500 salvage value at that time. The annual operating and maintenance costs for the mixer equal $6,000/year. Because of an increase in business, a new mixer must be purchased. If the old mixer is retained, a new mixer will be purchased at a cost of $25,000 and have a $4,000 salvage value in 10 years. This new mixer will have annual operating and maintenance costs equal to $5,000/year. The old mixer can be sold and a new mixer of larger capacity purchased for $32,000. This mixer will have a $6,000 salvage value in 10 years and will have annual operating and maintenance costs equal to $8,000/year. Based on a MARR of 15% and using a cash flow approach, what do you recommend?

Aug 18 2020 View more View Less

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