As part of the annual capital allocation process at Manufacturing Systems, you have been asked to calculate the present value for the replacement of an existing air compressor. The relevant data is listed below.
Initial Cost ($) Salvage Value ($) Estimated Life (yrs) Projected Annual Operating & Maintenance Cost ($) Interest Rate (%)
186,000 21.000 7 52,000 12
A. B. C. D.
-413,816 41.816 392,816 -432.815