A firm is considering the replacement of a machine, whose cost price is Rs 12,200 and its scrap value is Rs 200. From experience the running (maintenance and operating) costs are found to be as follows: Year 1 2 3 4 5 6 7 8 Running Cost 200 500 800 1,200 1,800 2,500 3,200 4,000 When should the machine be replaced?
A firm is considering the replacement of a machine, whose cost price is Rs 12,200 and its scrap value is Rs 200. From experience the running (maintenance and operating) costs are found to be as follows: Year 1 2 3 4 5 6 7 8 Running Cost 200 500 800 1,200 1,800 2,500 3,200 4,000 When should the machine be replaced?
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 firm is considering the replacement of a machine, whose cost price is Rs 12,200 and its scrap value is Rs 200. From experience the running (maintenance and operating) costs are found to be as follows:
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
|---|---|---|---|---|---|---|---|---|
| Running Cost | 200 | 500 | 800 | 1,200 | 1,800 | 2,500 | 3,200 | 4,000 |
When should the machine be replaced?
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