EBK ENGINEERING ECONOMY
EBK ENGINEERING ECONOMY
17th Edition
ISBN: 9780134838229
Author: Sullivan
Publisher: PEARSON
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Chapter 9, Problem 13P

Use the PW method to select the better of the following alternatives:

Chapter 9, Problem 13P, Use the PW method to select the better of the following alternatives: Assume that the defender was

Assume that the defender was installed five years ago. The MARR is 10% per year.

Definition of alternatives:

A: Retain an already owned machine (defender) in service for eight more years.

B: Sell the defender and lease a new one (challenger) for eight years.

Alternative A (additional information):

Cost of defender five years ago = $500,000

BV now = $111,550

Estimated MV eight years from now = $50,000

Present MV = $150,000

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