Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 54

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