A company is buying mini computers. It costs Rs 2,50,000, and its running and maintenance costs are Rs 1,20,000 for each of the first five years, increasing by Rs 20,000 per year in the sixth and subsequent years. If the money is worth 10 percent per year, What is the optimal replacement period? Year 1 2 3 4 5 6 7 8 9 10 Running Cost 1,20,000 1,20,000 1,20,000 1,20,000 1,20,000 1,40,000 1,40,000 1,60,000 1,80,000 2,00,000
A company is buying mini computers. It costs Rs 2,50,000, and its running and maintenance costs are Rs 1,20,000 for each of the first five years, increasing by Rs 20,000 per year in the sixth and subsequent years. If the money is worth 10 percent per year, What is the optimal replacement period? Year 1 2 3 4 5 6 7 8 9 10 Running Cost 1,20,000 1,20,000 1,20,000 1,20,000 1,20,000 1,40,000 1,40,000 1,60,000 1,80,000 2,00,000
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A company is buying mini computers. It costs Rs 2,50,000, and its running and maintenance costs are Rs 1,20,000 for each of the first five years, increasing by Rs 20,000 per year in the sixth and subsequent years. If the money is worth 10 percent per year, What is the optimal replacement period?
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Running Cost | 1,20,000 | 1,20,000 | 1,20,000 | 1,20,000 | 1,20,000 | 1,40,000 | 1,40,000 | 1,60,000 | 1,80,000 | 2,00,000 |
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