Engineering Economy, Student Value Edition (17th Edition)
17th Edition
ISBN: 9780134838137
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 9, Problem 28SE
To determine
Calculate the economic life.
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Briefly explain what is meant by the defender/ challenger concept.
The marginal costs of a defender for each of the final four years of service are $1,300, $1,600, $2,000 and $2,400, respectively. If the challenger's minimum EUAC is $2,055, the defender should be replaced at
the end of what year? (Note: Choose "0" if recommending to replace immediately)
○ A. 4
B. 1
○ C. 0
○ D. 2
○ E. 3
What are the three aspects of the replacement problem?
Chapter 9 Solutions
Engineering Economy, Student Value Edition (17th Edition)
Ch. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4PCh. 9 - Prob. 5PCh. 9 - Prob. 6PCh. 9 - Prob. 7PCh. 9 - A city water and waste-water department has a...Ch. 9 - Prob. 9PCh. 9 - Prob. 10P
Ch. 9 - Prob. 11PCh. 9 - Prob. 12PCh. 9 - Use the PW method to select the better of the...Ch. 9 - Prob. 14PCh. 9 - Prob. 15PCh. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Prob. 26PCh. 9 - Prob. 27SECh. 9 - Prob. 28SECh. 9 - Prob. 29CSCh. 9 - Prob. 30CSCh. 9 - Prob. 31CSCh. 9 - Prob. 32FECh. 9 - Prob. 33FECh. 9 - Prob. 34FECh. 9 - Prob. 35FECh. 9 - Prob. 36FE
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- The following tables show the marginal costs of a defender over its remaining four years of service life. If the challenger's minimum EUAC is $29,403, what is the most appropriate replacement decision? Year 1234 Marginal cost $31,053 $26,353 $28,003 $32,803 ○ A. No decision can be made unless additional calculations are made on the challenger B. Replace the defender now OC. No decision can be made unless additional calculations are made on the defender ○ D. Keep the defender for at least one more yeararrow_forwardHow can the economic life of the challenger be determined?arrow_forwardAn electronic balance costs BD9,000 and has an estimated salvage value of BD800 at the end of its 10 years life. What would be the book value after three years using the DDB? a. BD 4,608.00 b. BD 5,000.00 c. BD 5,100.00arrow_forward
- IN-N-OUT BURGER An increase in demand causes the profit on a competition sail to rise to $260. How does that change the number of sails of each to be manufactured and the maximum profit? 02017 In-N-Out Burgearrow_forwardhelp please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingarrow_forward1-)According to replacement analysis, determine the number of years that the defender should be used before replacement. Defender Challenger Year, TC EUAC TC EUAC k 1 14,000 14,000 15,000 15,000 2 12,000 13,038 11,500 13,317 Scenario 3 13,000 13,027 14,000 13,528 1 4 14,000 13,243 14,500 13,743 5 15,500 13,627 16,000 14,128 Your answer: Use defender: 5 years than replace with the challenger Use defender: 3 years than replace with the challenger Use defender: 1 year than replace with the challenger Use defender: 0 year than replace with the challenger Use defender: 2 years than replace with the challenger Use defender: 4 years than replace with the challengerarrow_forward
- 1) The following data represent a defender. Given this data, what is the correct replacement analysis technique to compare this asset against a challenger? How do we know? Year BTCF (Marginal cost) $ $ $ $ 1 3,800.00 2,700.00 2,200.00 4,100.00 4arrow_forwardPlease view the following video before answering this question. Video Solution: 04.05-PR002 Click here to access the TVM Factor Table Calculator Two incinerators are being considered by a waste management company. Design A has an initial cost of $2,950,000, has annual operating and maintenance costs of $600,000, and requires overhauls every 5 years at a cost of $1,475,000. Design B is more sophisticated, including computer controls; it has an initial cost of $6,025,000, has annual operating and maintenance costs of $450,000, and requires overhauls every 10 years at a cost of $2,550,000. Part a Using a 5.0 %/year interest rate, determine the capitalized cost for each design. Design A: $ Design B: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±400.arrow_forwardHome Furniture paid $65 for a lamp. Expenses are 14% of selling price and the required profit is 21% of selling price. Round ALL answers to the nearest cent if applicable. 1) What is the regular selling price? $ 2) What is the break-even selling price? 3) During an inventory sale, the lamp was marked down 30% on the regular selling price. What is the sale price? 4) What is the operating profit or loss during the inventory sale (use a negative sign (-) for a loss)? $arrow_forward
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