An old boiler cost P 2,400 a year to maintain. What expenditures for a new boiler is justified if no maintenance will be required for the first three years, P600 per year for the next 7 years and P2,400 a year thereafter. Assume money to cost 4% annually and no other cost to be considered.

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A: Costs = $12,000 Revenue = $4,000 Operating Expenses = $1,200 Time period = 8 years  Rate = 10%

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A: Here, At the end of year 2 , maintenance cost is P60,000 From Year 3 to Year 7, Maintenance Cost is…

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A: SOLUTION- BREAK EVEN POINT  IS THE POINT AT WHICH TOTAL REVENUE EQUALS TO TOTAL COST OR EXPENSES.

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A: Present value=future value/(1+r)^n

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A:

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A: In this we need to find out the Present value of savings.

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A: Data Given: Initial cost of Machine= $6000 MARR =9% Required:: Economic service life = ?

Q: P 1

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A: Please see the next step for the solution

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A: It has been given in the question that the interest rate is 3.5% annually. And the maintenance cost…

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A: First cost (F) = P 150000 Let A = Annual saving Salvage value (S) = P 15000 n = 5 years r = 15%