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Business, 20.02.2020 22:21 aliviafrancois2000

System one will cost $145,000, have annual maintenance costs of $10,000, and need an overhaul at the end of year six costing $30,000. System two will have first year maintenance costs of $5,000 with increases of $500 each year thereafter. System two would not require an overhaul. Both systems will have no salvage value after 12 years. If Littrell's cost of capital is 4%, using annual worth analysis determine the maximum Littrell's should be willing to pay for system two.

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