Question

Asked Sep 29, 2019

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Please show all equations and work as needed. Make the correct answer clear. If possible, please type work so it can be copied. Thank you.

Step 1

If C_{0} is the cost to purchase the machine, S is the salvage value at the end of year n and C is the annual maintenance cost over the life of n years then equivalent annual cost, EAC is given by the expression on the white board. r is the discount rate

Step 2

C0 = 100,000; C = 20,000; n = 10, r = 10% = 0.1,

Hence, E...

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