Finding the Economic Life of the NewCNC Machine. Find TC and EUAC for each year. Year 1Year 2Year 3Year 4O&M costs$35,000 $35,000 $35,000 $35,000Market value$75,000 $60,000 $50,000 $45,000Marginal costs:Year 1Year 2Year 3Year 4O&M$35,000 $35,000 $35,000 $35,000$15,000 $15,000 $10,000$5,000DepreciationInt. on capital$13,500 $11,250 $9,000$7,500

Answered: Year 1 Year 2 Year 3 Year 4 O&M costs…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Finding the Economic Life of the New
CNC Machine. Find TC and EUAC for each year.

Year 1
Year 2
Year 3
Year 4
O&M costs
$35,000 $35,000 $35,000 $35,000
Market value
$75,000 $60,000 $50,000 $45,000
Marginal costs:
Year 1
Year 2
Year 3
Year 4
O&M
$35,000 $35,000 $35,000 $35,000
$15,000 $15,000 $10,000
$5,000
Depreciation
Int. on capital
$13,500 $11,250 $9,000
$7,500

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ANSWER

The economic life of the the defender is often 1 year so a proper analysis may be between different lived alternatives. The defender may be kept longer than it is apparent economic life as long as it is marginal cost is less than the minimum EUAC of the Challenger over its economic life.

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