Two stamping machines are under consideration for purchase by a metal recycling company.
The manual model will cost $25,000 to buy with an eight-year life and a $5,000 salvage value. Its annual operating costs will be $16,000.
A computer-controlled model will cost $95,000 to buy and it will have a twelve-year life if upgraded at the end of year six for $15,000.
Its terminal salvage value will be $23,000, with annual operating costs of $7,500 for labor and $2,500 for maintenance.
The company's minimum attractive rate of return is 18%. The annual worth of the computer-controlled machine is nearest to ?