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 dedine in value by 20 percent of current value each year Ins follows. Asset First Cost Initial Operating Cost A $135.000 B$135,000 $30,000 $30,000 90000 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%. Total [ a. The economic life of asset A is years, and the economic life of asset B is years. (Type whole numbers.) b. Create a diagram for asset A. Choose the correct diagram below. OA Rate of Operating Cost Increase Q Maintenance …………………………êões a 12.5%/year 12.5%/year MARR 5% 25% OB 90000₂ Total 4444444 ******** Maintenance

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 dedine in value by 20 percent of current value each year Ins follows. Asset First Cost Initial Operating Cost A $135.000 B$135,000 $30,000 $30,000 90000 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%. Total [ a. The economic life of asset A is years, and the economic life of asset B is years. (Type whole numbers.) b. Create a diagram for asset A. Choose the correct diagram below. OA Rate of Operating Cost Increase Q Maintenance …………………………êões a 12.5%/year 12.5%/year MARR 5% 25% OB 90000₂ Total 4444444 ******** Maintenance

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2
Instruction: Provide a complete solution.
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