A machine has a first cost of $50,000. Its market value declines by 20% annually. The operating and maintenance costs start at $3,500 per year and climb by $2,000 per year. The firm's MARR is 10%. Find the minimum EUAC for this machine and its economic service life.

A machine has a first cost of $50,000. Its market value declines by 20% annually. The operating and maintenance costs start at $3,500 per year and climb by $2,000 per year. The firm's MARR is 10%. Find the minimum EUAC for this machine and its economic service life.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A machine has a first cost of $50,000. Its market value declines
by 20% annually. The operating and maintenance costs start
at $3,500 per year and climb by $2,000 per year. The firm's
MARR is 10%.
Find the minimum EUAC for this machine and its economic
service life.

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