Maintenance work will be necessary on the new equipment in Year 3, costing $3,000. The current equipment will last for five more years; the life of the new equipment is also five years. Assuming a discount rate of 5%, what is the net present value of replacing the current equipment?
X Company must decide whether to continue using its current equipment or replace it with new, more efficient equipment. The following information is available for the current and new equipment:Current equipmentCurrent sales value$5,000Final sales value6,000Operating costs69,000New equipmentPurchase cost$55,000Final sales value6,000Operating cost savings9,50
