Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15% -per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct? Equipment Original purchase price, S Current market value, $ Remaining life, years Proposed -42,000 Estimated value in 5 years, $ Salvage value after 15 years, S AOC. $ per year The AW of the defender is $- Wilma (Click to select) correct Current -30,000 15,000 5 7,000 -13,000 T 15 10,000 5,000 -3,000 and the AW of the challenger is $-

Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15% -per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct? Equipment Original purchase price, S Current market value, $ Remaining life, years Proposed -42,000 Estimated value in 5 years, $ Salvage value after 15 years, S AOC. $ per year The AW of the defender is $- Wilma (Click to select) correct Current -30,000 15,000 5 7,000 -13,000 T 15 10,000 5,000 -3,000 and the AW of the challenger is $-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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oncurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2 -year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5 -year study period, and the estimates below. Was Wilma correct? \table[[Equipment,Current,Proposed],[Original purchase price, $,-30,000,-42,000
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