A piece of production equipment is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are a used piece of equipment (E1) and a new automated model (E2). The economic estimates for each are shown in the accompanying table. The MARR is 15% per year. Click the icon to view the interest and annuity table for discrete compounding when i=15% per year. a. Which alternative is preferred, based on the repeatability assumption? The AW of the alternative E1 is $. (Round to the nearest hundreds.) The AW of the alternative E2 is $. (Round to the nearest hundreds.) Which alternative is preferred? Choose the correct answer below. Capital investment Annual expenses Useful life (years) Market value (at the end of useful life) O Alternative E2 O Alternative E1 Alternative E1 E2 $15,000 $66,000 $13,000 $10,000 5 20 $7,500 $13,000

A piece of production equipment is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are a used piece of equipment (E1) and a new automated model (E2). The economic estimates for each are shown in the accompanying table. The MARR is 15% per year. Click the icon to view the interest and annuity table for discrete compounding when i=15% per year. a. Which alternative is preferred, based on the repeatability assumption? The AW of the alternative E1 is $. (Round to the nearest hundreds.) The AW of the alternative E2 is $. (Round to the nearest hundreds.) Which alternative is preferred? Choose the correct answer below. Capital investment Annual expenses Useful life (years) Market value (at the end of useful life) O Alternative E2 O Alternative E1 Alternative E1 E2 $15,000 $66,000 $13,000 $10,000 5 20 $7,500 $13,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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