HW7 Soln 10

# HW7 Soln 10 - ENG 106 Homework #7 Solution Winter 2010...

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Unformatted text preview: ENG 106 Homework #7 Solution Winter 2010 Problem 11.13 Given: Company considering replacing an existing machine. For the challenger: Purchase cost, \$ 31000 Economic service life (ESL), years 10 Salvage value @ EOY 10, \$ 2500 Operating costs, \$/year, EOY 1 thru 1 1000 For the defender: EO Y S, \$ Operating Costs, \$/yr 7700 1 43003200 2 33003700 3 11004800 4 05850 Other extraneous information (original cost, estimated life,…) MARR: 12% Infl Rate 0% Find: (a) the remaining ESL of the defende r (b) whether the defender should be replaced now Calculations: MARR' 12% = (1 + MARR)/(1 + f) - 1 Constant-dollar AEW for the challenger:-6,344 = -purchase cost(A/P,MARR') - op cost + salvage value(A/F,MARR',10) =PMT(MARR',ESL,purchase cost)-operating cost-PMT(MARR',ESL,0,salvage value) AEWs for the defender Yrs kept, N: 1 2 3 4 EOY n: 1 1 2 1 2 3 1 2 3 4 Oper.Flow, \$-3200-3200-3700-3200-3700-4800-3200-3700-4800-5850 Opp.Cost, \$-7700-7700-7700-7700 S, \$ 4300 3300 1100 ATCF,\$/yr-7700 1100-7700-3200-400-7700-3200-3700-3700...
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## This note was uploaded on 04/09/2010 for the course ENGR ENG106 taught by Professor Hartsrough during the Winter '10 term at UC Davis.

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HW7 Soln 10 - ENG 106 Homework #7 Solution Winter 2010...

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