The salvage value of an electric generator is $10 000, while its purchase price five years ago was $20 000. It produces 45.5 megawatt-hours of electricity per year and requires $800 in annual maintenance costs. A new generator can produce electricity at $0.05 per kilowatt-hour. Should the new generator be purchased if the annual interest rate is 7%?

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The Answer of The salvage value of an electric generator is $10 000, while its purchase price five years ago was $20 000. It produces 45.5 megawatt-hours of electricity per year and requires $800 in annual maintenance costs. A new generator can produce electricity at $0.05 per kilowatt-hour. Should the new generator be purchased if the annual interest rate is 7%?

The Salvage Value of an Electric Generator Is $10 000