A city water and waste-water department has a four-year-old sludge pump that was initially purchased for $65,000. This pump can be kept in service for an additional four years, or it can be sold for $36,500 and replaced by a new pump. The purchase price of the replacement pump is $48,000. The projected MVs and operating and maintenance costs over the four-year planning horizon are shown in the table that follows. Assuming the MARR is 12%, (a) determine the economic life of the challenger and (b) determine when the defender should be replaced. 工業 Challenger MV at EOY Defender Year MV at EOY O&M Costs O&M Costs $42,000 34,500 27,000 $25,000 $17.500 $12000 21,500 18,000 14,500 2 20,500 15,000 23,500 18,000 4 26,500 19,500 21,000 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. a. The economic life of the challenger is year(s). (Round to the nearest whole number.)

A city water and waste-water department has a four-year-old sludge pump that was initially purchased for $65,000. This pump can be kept in service for an additional four years, or it can be sold for $36,500 and replaced by a new pump. The purchase price of the replacement pump is $48,000. The projected MVs and operating and maintenance costs over the four-year planning horizon are shown in the table that follows. Assuming the MARR is 12%, (a) determine the economic life of the challenger and (b) determine when the defender should be replaced. 工業 Challenger MV at EOY Defender Year MV at EOY O&M Costs O&M Costs $42,000 34,500 27,000 $25,000 $17.500 $12000 21,500 18,000 14,500 2 20,500 15,000 23,500 18,000 4 26,500 19,500 21,000 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. a. The economic life of the challenger is year(s). (Round to the nearest whole number.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
The replacement of a planning machine is being considered by the Reardorn Furniture Company. (There is an indefinite future need for this type of machine.) The best challenger will cost $32,000 for installation and will have an estimated economic life of 11 years and a $1,800 MV at that time. It is estimated that annual expenses will average $16,000 per year. The defender has a present BV of $6,000 and a present MV of $3500. Data for the defender for the next three years are given below. Using a before-tax interest rate of 12% per year, make a comparison to determine whether it is economical to make the replacement now. MV at End of BV at End of Expenses during Year Year the Year $ - 1,500 $4,500 $18,000 - 2,000 3,000 1 2 22,000 3 - 2,500 1,500 26,000 Click the icon to view the interest and annuity table for discrete compounding when i = 12% per year. Year Fill in the table for the EUAC values for the defender for years 1-3. (Round to the nearest dollar.) Year 1 2 3 EUAC $ $ SA
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