Home » Suppose we are thinking about replacing an old computer with a new one. The old one cost us \$1,260,000; the new one will cost \$1,520,000.

# Suppose we are thinking about replacing an old computer with a new one. The old one cost us \$1,260,000; the new one will cost \$1,520,000.

Suppose we are thinking about replacing an old computer with a new one. The old one cost us \$1,260,000; the new one will cost \$1,520,000. The new machine will be depreciated straight-line to zero over its five-year life. It will probably be worth about \$260,000 after five years.
The old computer is being depreciated at a rate of \$252,000 per year. It will be completely written off in three years. If we don’t replace it now, we will have to replace it in two years. We can sell it now for \$380,000; in two years, it will probably be worth \$116,000. The new machine will save us \$286,000 per year in operating costs. The tax rate is 35 percent, and the discount rate is 10 percent.
Calculate the EAC for the old computer and the new computer.
Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
EAC New computer\$ Old computer\$
What is the NPV of the decision to replace the computer now?
Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
NPV\$

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.