Self-Study Questions

1.AB-Crystallography, Inc. paid $175k for a processor accelerator for their top-end computer when it was installed 3 years ago. Improvements in technology mean that a new accelerator today would help their system run 22% faster. The manufacturer of the new accelerator offers 30% of the purchase price of the old unit as trade-in on a new unit that would cost $250k installed. The entire present computer system will be replaced in 4 years, and the salvage values of the old and new accelerators are expected to be $30k and $45k, respectively, at that time. AB-C operates the computer 12 hours/day, 21 days per month. Operation and maintenance costs on the existing and the proposed accelerators are considered equivalent. If computer ...

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