5 Select all true statements from the options below.Select 2 correct answer(s)The existing system should be replaced by option 2 immediately.The existing system should be replaced by option 1 immediately.The economic life of options 1 and option 2 is longer than the economic life ofthe existing system.The existing system should not be replaced because the EAC at year 1 is lowerthan option 1 and option 2.The existing system should be replaced by option 1 after 3 years.Option 2 has the longest economic life of 5 years.The existing system should be replaced by option 2 after 5 years. Question 1A company is considering replacing its existing sheet metal laser-cutting machinewith a new model. The EAC values for the current machine and two possiblereplacements are shown in the table.EAC forEAC for existingsystemEAC forreplacement option replacement optionN (years)1$9,550$9,400$9,030$9,820$12,780$11,790$10,410$9.990$10,1302$9,830$9,280$9,190$9,020$9,260$9,370$9,600$9,970$10,0504$10,210$11,490$12,820$13,840$15,150$16,470Select all true statements from the options below.$9.330$9,010$9,150$9,890$10,220$11,4708.10Select 2 correct answerts)The existing system should be replaced by option 2 immediately.

EAC stands for Equivalent annual cost. EAC is the annual cost of owning, operating and maintaining…

Select all true statements from the options below. Select 2 correct answer(s) The existing system should be replaced by option 2 immediately. The existing system should be replaced by option 1 immediately. The economic life of options 1 and option 2 is longer than the economic life of the existing system. The existing system should not be replaced because the EAC at year 1 is lower than option 1 and option 2. The existing system should be replaced by option 1 after 3 years. Option 2 has the longest economic life of 5 years. The existing system should be replaced by option 2 after 5 years.

Select all true statements from the options below. Select 2 correct answer(s) The existing system should be replaced by option 2 immediately. The existing system should be replaced by option 1 immediately. The economic life of options 1 and option 2 is longer than the economic life of the existing system. The existing system should not be replaced because the EAC at year 1 is lower than option 1 and option 2. The existing system should be replaced by option 1 after 3 years. Option 2 has the longest economic life of 5 years. The existing system should be replaced by option 2 after 5 years.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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