Question
1. A replacement analysis is being done for a vacuum seal on a spacecraft. The current seal can be used for 10 more years, or
1. A replacement analysis is being done for a vacuum seal on a spacecraft. The current seal can be used for 10 more years, or a new one can be purchased and used instead. The new seal would cost $25,000, and there would be an annual $5.000 of maintenance cost. It is estimated the seal could be sold for $7,000 in 10 years. The current seal can be sold now for $9.000 or for $2.000 in 10 years. The required annual maintenance cost is $7.500 Using 10 years for both alternatives and 12% cost of capital, calculate the present worth of both the defender and the challenger and determine whether the seal should be replaced.
2. A new robot could be acquired for 560,000, and be kept for up to 4 years its annual expenses would be 58.000 $9,000 $14,000, and $20.000 in years 1 to 4 in the same order The robot's market value would be $45,000 533,750, 525,500 and $19.500 at the end of years 1 to in the same order Determine the economic life of the robot, assuming 10% cost of capital.
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