An equipment cost $90.000 initially. The market value the first year was 80,000and has been declining at the rate of $6.000 yearly. The O & M costs in year 1were $7.000 and have been increasing by $2.000 from year 2. Determine theminimum cost life of this equipment for a MARR of 10 %.Based on the chart below,a. what is the economic life of this piece of equipment.b. What is the minimum economic cost?OM cost PWCostYearCostSalvageEUAC9000017000$96,363.6480000($26,000.00)9000$103,801.6574000(524.571.43)311000$112,066.1268000($24.519.64)413000$120,945.2962000($24.795.52)15000$130,259.1156000($25,189.37)617000$139,855.1750000(525.631.41)719000$149.605.1744000(526.091.88)821000$159,401.8338000($26,556.05)9.23000$169,156.0732000($27,015.85)1025000$178,794.6526000(527.466.63)O a. 6 years b. $27,466.63O a. 8 years b. $80.000O a. 3 years b. $25,519.64O a. 10 years b. $24.664.99

Given: Cost of an equipment = $90,000 The market value of equipment is = $80,000 Declines by the…

An equipment cost $90,000 initially. The market value the first year was 80,000 and has been declining at the rate of $6.000 yearly. The O& M costs in year 1 were $7.000 and have been increasing by $2.000 from year 2. Determine the minimum cost life of this equipment for a MARR of 10 %. Based on the chart below, a. what is the economic life of this piece of equipment, b. What is the minimum economic cost? Year Cost OM cost PWCost Salvage EUAC 90000 1 7000 $96,363.64 80000 ($26,000.00) 9000 $103.801.65 74000 ($24,571.43) 11000 $112.066.12 68000 ($24.519.64) 13000 $120,945.29 62000 ($24,795.52) 15000 $130,259.11 56000 ($25,189.37) 17000 $139,855.17 50000 ($25.631.41) 19000 $149,605.17 44000 ($26.091.88) 8. 21000 $159,401.83 38000 ($26,556.05) 9. 23000 $169,156.07 32000 ($27,015.85) 10 25000 $178,794.65 26000 ($27.466.63) O a.6 years b. $27,466.63 O a. 8 years b. $80,000 O a. 3 years b. $25,519.64 O a. 10 years b. $24.664.99 *no 7

An equipment cost $90,000 initially. The market value the first year was 80,000 and has been declining at the rate of $6.000 yearly. The O& M costs in year 1 were $7.000 and have been increasing by $2.000 from year 2. Determine the minimum cost life of this equipment for a MARR of 10 %. Based on the chart below, a. what is the economic life of this piece of equipment, b. What is the minimum economic cost? Year Cost OM cost PWCost Salvage EUAC 90000 1 7000 $96,363.64 80000 ($26,000.00) 9000 $103.801.65 74000 ($24,571.43) 11000 $112.066.12 68000 ($24.519.64) 13000 $120,945.29 62000 ($24,795.52) 15000 $130,259.11 56000 ($25,189.37) 17000 $139,855.17 50000 ($25.631.41) 19000 $149,605.17 44000 ($26.091.88) 8. 21000 $159,401.83 38000 ($26,556.05) 9. 23000 $169,156.07 32000 ($27,015.85) 10 25000 $178,794.65 26000 ($27.466.63) O a.6 years b. $27,466.63 O a. 8 years b. $80,000 O a. 3 years b. $25,519.64 O a. 10 years b. $24.664.99 *no 7

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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