A machine purchased a year ago for $85,000 costs more to operate than anticipated. At the time of the purchase, it was expected to be used for 10 years with annual maintenance costs of $22,000 and a salvage value of $10,000. However, last year, it incurred a cost $35000, which is expected to escalate to $36,400 this year and increase by $1400 each year thereafter. The market value is now estimated to be $66000-$10000k, where k is the number of years since the machine was purchased. It is now estimated that the machine will be useful for a maximum of 4.00 more years. A replacement study is to be performed. Determine the values of P, n, AOC for year 4.00 and S of this defender. The value of P is $ The value of n is The AOC for year 4.00 is The value of S is $ years.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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A machine purchased a year ago for $85,000 costs more to operate than anticipated. At the time of the purchase, it was expected to
be used for 10 years with annual maintenance costs of $22,000 and a salvage value of $10,000. However, last year, it incurred a cost
$35000, which is expected to escalate to $36,400 this year and increase by $1400 each year thereafter. The market value is now
estimated to be $66000-$10000k, where k is the number of years since the machine was purchased. It is now estimated that the
machine will be useful for a maximum of 4.00 more years. A replacement study is to be performed. Determine the values of P, n, AOC
for year 4.00 and S of this defender.
The value of P is $
The value of n is
The AOC for year 4.00 is
The value of S is $
years.
Transcribed Image Text:A machine purchased a year ago for $85,000 costs more to operate than anticipated. At the time of the purchase, it was expected to be used for 10 years with annual maintenance costs of $22,000 and a salvage value of $10,000. However, last year, it incurred a cost $35000, which is expected to escalate to $36,400 this year and increase by $1400 each year thereafter. The market value is now estimated to be $66000-$10000k, where k is the number of years since the machine was purchased. It is now estimated that the machine will be useful for a maximum of 4.00 more years. A replacement study is to be performed. Determine the values of P, n, AOC for year 4.00 and S of this defender. The value of P is $ The value of n is The AOC for year 4.00 is The value of S is $ years.
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