Don't use excel or any tables, compute by a conventional method. Completely solve to fill in Blank 1, Blank 2, and Blank 3. Box the final answers. Write legibly or typewrite the solutions. A piece of production equipment is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are a used piece of equipment (E1) and a new automated model (E2). The economic estimates for each are shown in the accompanying table. The MARR is 15% per
Don't use excel or any tables, compute by a conventional method. Completely solve to fill in Blank 1, Blank 2, and Blank 3. Box the final answers. Write legibly or typewrite the solutions. A piece of production equipment is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are a used piece of equipment (E1) and a new automated model (E2). The economic estimates for each are shown in the accompanying table. The MARR is 15% per
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Don't use excel or any tables, compute by a conventional method. Completely solve to fill in Blank 1, Blank 2, and Blank 3. Box the final answers.
Write legibly or typewrite the solutions.
A piece of production equipment is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are a used piece of equipment (E1) and a new automated model (E2). The economic estimates for each are shown in the accompanying table.
The MARR is 15% per year.
Which alternative is preferred based on the:
(c) repeatability assumption. Use FW method.
FW (E1) = $_____?
FW (E2) = $_____?
The best alternative is E_____?
![Alternative
E1
E2
Capital investment
Annual expenses
Useful life (years)
Market value (at end
of useful life)
$14,000
$14,000
$65,000
$9,000
20
$8,000
$13,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1e7ffa2a-23a3-47c5-b016-ba17b777fedf%2F3b571154-ae50-4a0a-be8c-2266c08a8fda%2F9uc5r3f_processed.png&w=3840&q=75)
Transcribed Image Text:Alternative
E1
E2
Capital investment
Annual expenses
Useful life (years)
Market value (at end
of useful life)
$14,000
$14,000
$65,000
$9,000
20
$8,000
$13,000
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