The equivalent annual worth of the process currently used in manufacturing motion controllers is AW $62,000

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The equivalent annual worth of the process currently used in manufacturing motion controllers is AW  $62,000 per year. A replacement process is under consideration that will have a first cost of

$64,000 and an operating cost of $38,000 per year for the next 3 years. Three different engineers have given their opinion about what the salvage value of the new process will be 3 years from now as follows: $10,000, $13,000, and $18,000. Is the decision to replace the process sensitive to the salvage value estimates at the company’s MARR of 15% per year?

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Basics Of Engineering Economy

ISBN: 9780073376356

2nd Edition

Authors: Leland T. Blank, Anthony Tarquin

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