Please answer A by filling in the blanks, ignore b and c, thank you The following pair of assets differ only in the MARR. The problem asks you to determine the effect of this difference on the economic life and to explain the result.All assets decline in value by 20 percent of current value each year. Installation costs are zero for all assets. Further data concerning the four pairs of assets aregiven in the table that follows.Initial OperatingCost$35,000$35,000Rate of OperatingAssetFirst CostCost IncreaseMARR$120,000$120,00013.5%/year13.5%/yearA5%В25%a. Determine the economic lives for assets A and B.b. Create a diagram showing the EAC(capital), the EAC(operating), and the EAC(total) for assets A and B.c. Explain the difference in economic life between A and B.Click the icon to view the table of compound interest factors for discrete compounding periods when i= 5%.a. The economic life of asset A isyears, and the economic life of asset B is years.(Type whole numbers.)

To find the economic life of an asset , we find the annual worth of cumulative operating costs and…

The following pair of assets differ only in the MARR. The problem asks you to determine the effect of this difference on the economic life and to explain the resu All assets decline in value by 20 percent of current value each year. Installation costs are zero for all assets. Further data concerning the four pairs of assets are given in the table that follows. Initial Operating Rate of Operating MARR 5% 25% Asset First Cost Cost $35,000 $35,000 Cost Increase S120,000 13.5%lyear 13.5%/year A B $120,000 a. Determine the economic lives for assets A and B. b. Create a diagram showing the EAC(capital), the EAC(operating), and the EAC(total) for assets A and B. c. Explain the difference in economic life between A and B. Click the icon to view the table of compound interest factors for discrete compounding periods when i=5%. a. The economic life of asset A is years, and the economic life of asset B is years.

The following pair of assets differ only in the MARR. The problem asks you to determine the effect of this difference on the economic life and to explain the resu All assets decline in value by 20 percent of current value each year. Installation costs are zero for all assets. Further data concerning the four pairs of assets are given in the table that follows. Initial Operating Rate of Operating MARR 5% 25% Asset First Cost Cost $35,000 $35,000 Cost Increase S120,000 13.5%lyear 13.5%/year A B $120,000 a. Determine the economic lives for assets A and B. b. Create a diagram showing the EAC(capital), the EAC(operating), and the EAC(total) for assets A and B. c. Explain the difference in economic life between A and B. Click the icon to view the table of compound interest factors for discrete compounding periods when i=5%. a. The economic life of asset A is years, and the economic life of asset B is 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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