The table below contains the calculated annual equivalent cost for a defender and a challenger based on the market value and the maintenance cost: EOY DefenderAEC ChallengerAEC 0 $21,856 $22,035 1 $19,157 $19,396 2 $18,271 $18,677 3 $18,538 $17,545 4 $17,318 $16,811 5 $17,000 $25,703 6 $25,174 $28,353 7 $27,331 $28,779 Which of the following statements are true? Select all that apply. The economic life of the challenger is 5 years. The defender should be replaced now. The annual equivalent cost of the challenger is greater than the annual equivalent cost of the defender. The economic life of the defender is 5 years The annual equivalent cost of the defender is greater than the annual equivalent cost of the challenger. The defender should not be replaced now. The economic life of the defender is 4 years. The economic life of the challenger is 4 years.
The table below contains the calculated annual equivalent cost for a defender and a challenger based on the market value and the maintenance cost: EOY DefenderAEC ChallengerAEC 0 $21,856 $22,035 1 $19,157 $19,396 2 $18,271 $18,677 3 $18,538 $17,545 4 $17,318 $16,811 5 $17,000 $25,703 6 $25,174 $28,353 7 $27,331 $28,779 Which of the following statements are true? Select all that apply. The economic life of the challenger is 5 years. The defender should be replaced now. The annual equivalent cost of the challenger is greater than the annual equivalent cost of the defender. The economic life of the defender is 5 years The annual equivalent cost of the defender is greater than the annual equivalent cost of the challenger. The defender should not be replaced now. The economic life of the defender is 4 years. The economic life of the challenger is 4 years.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
The table below contains the calculated annual equivalent cost for a defender and a challenger based on the market value and the maintenance cost:
| EOY | Defender AEC |
Challenger AEC |
| 0 | $21,856 | $22,035 |
| 1 | $19,157 | $19,396 |
| 2 | $18,271 | $18,677 |
| 3 | $18,538 | $17,545 |
| 4 | $17,318 | $16,811 |
| 5 | $17,000 | $25,703 |
| 6 | $25,174 | $28,353 |
| 7 | $27,331 | $28,779 |
Which of the following statements are true? Select all that apply.
The economic life of the challenger is 5 years.
The defender should be replaced now.
The annual equivalent cost of the challenger is greater than the annual equivalent cost of the defender.
The economic life of the defender is 5 years
The annual equivalent cost of the defender is greater than the annual equivalent cost of the challenger.
The defender should not be replaced now.
The economic life of the defender is 4 years.
The economic life of the challenger is 4 years.
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