Chap 9 examples

Chap 9 examples - Example 1 ABC Corp. has a crane with...

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Example 1 ABC Corp. has a crane with remaining life of 10 years. Can be sold for $8,000 now. If kept in service, it has to be overhauled immediately for a cost of $4,000. Operating and maintenance costs are $3,000 per year if crane is overhauled. What is the total capital investment value of the crane? Chap 9 Examples
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Example 2 Crane will have zero MV at EOY 10. New crane costs $18,000, will last for 10 years, and have $4,000 MV. Operating and maintenance costs are $1,000 per year for new crane. Before-tax MARR of 10%. Replace old crane? Chap 9 Examples
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Chap 9 Examples Example 3 A pump was bought for $65,000 and can be kept in service for 4 more years, or sold now for $35,000 and replaced by a new pump costing $50,000. Projected MVs, expenses for both defender and challenger given below. MARR is 10%. a) Determine economic life of challenger b) Determine when defender should be replaced Defender Challenger Year MV at EOY MV at EOY 1 25,000 18,500 40,000 13,000 2 21,000 21,000 32,000 15,500 3 17,000 23,500 24,000 18,000 4 13,000 26,000 16,000 20,500
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Chap 9 examples - Example 1 ABC Corp. has a crane with...

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