(Solution) - A machine that is currently used in manufacturing circuit board -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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A machine that is currently used in manufacturing circuit board card locks has AW = $-63,000 per year. A possible replacement is under consideration with a first cost of $64,000 and an operating cost of $38,000 per year for the next 3 years. Three different engineers have given their opinion, about what the salvage value of the new machine will be 3 years from now: $10,000, $13,000, and $18,000. Is the decision to replace the machine sensitive to the salvage value estimates at the company's MARR of 15% per year?