quipment (defender) or replace them with the new productive equi hallenger). The details of the cost required are shown in Table Q3(b) belov a interest rate of 20% per year. Table Q3(b) Items Defender Challe Initial cost eight (8) years ago (RM) Market value (RM) Yearly handling cost (RM) Life time (year) Salvage value (RM) 450,000 25,000 160,000 700,0 70,0 10 50,0 Use the replacement analysis to justify whether the existing equipm required to be replaced with the new equipment. i) If the existing equipment (defender) could be sold in international n determine how much is the minimum value of the defender so th challenger could replace the defender now?

quipment (defender) or replace them with the new productive equi hallenger). The details of the cost required are shown in Table Q3(b) belov a interest rate of 20% per year. Table Q3(b) Items Defender Challe Initial cost eight (8) years ago (RM) Market value (RM) Yearly handling cost (RM) Life time (year) Salvage value (RM) 450,000 25,000 160,000 700,0 70,0 10 50,0 Use the replacement analysis to justify whether the existing equipm required to be replaced with the new equipment. i) If the existing equipment (defender) could be sold in international n determine how much is the minimum value of the defender so th challenger could replace the defender now?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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