EBK ENGINEERING ECONOMY
EBK ENGINEERING ECONOMY
17th Edition
ISBN: 9780134838229
Author: Sullivan
Publisher: PEARSON
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Chapter 9, Problem 26P

(a):

To determine

Calculate the economic life.

(b):

To determine

Calculate the economic life.

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A machine that has been used for 8 years has a market value of $2,500 now, which decreases by $100 each year for the next 5 years. Maintenance costs this year are $5k, and for the next 5 years they are estimated at $6k, $7k, $8k and $9k. Determine the marginal cost of extending the service for two years if the MARR is 12%. Answer the questions: a) How much is the loss in market value in year 2? b) How much is the loss in interest in year 2? c) What is the Marginal Cost in year 2? d) If the machine's minimum EUAC is $5,500, when, in years, should the machine be replaced?
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