6.1 The Crocobeach Hotel is considering replacing an industrial oven system of their kitchen. The purchase cost of a new one will be $122,000 and will have lower maintenance costs per year compared with the older one. The current machine can be sold for $52,000 now. The salvage value and maintenance costs per year are listed below for both altematives. Assume a 3-year useful life and the MARR is 8%. EOY 0 1 2 3 Old Machine New Machine Salvage Value Maintenance Costs Salvage Value Maintenance Costs $ 52,000 $ $ 122,000 $ $ 46,000 $ 7,000 $ 110,000 $ 2,800 $ 39,600 $ 10.2003 105,000 $ 3,900 $ 34.000 $ 12.400 $ 98,000 $ 4,500 a) Calculate the Marginal Cost of the Old machine (Defender). Which replacement analysis technique will you use and why? (10 points) EOY S Value at EOY Loss in Market Interest Interest in Year Total Marginal Maint. Cost Value Rate N Cost o 1 2 3 b) Find the EUACs of the Capital Recovery for new machine (Challenger). [10 points] EOY S Value at EOY P-S (A/P,8%,N) S'i CR EUAC 0 1 2 3 Page 1 of 3 Find the EUACs of Maintenance Cost for new machine (Challenger). [10 points) d) Find the Total EUACs of the two altematives (8 points) e) When (Economic Life) should the old machine be replaced? Why? [2 point] 6.2 Alligatuur, local gin producer, is evaluating to buy a new distiller. The distiller's first cost is $53,000, and the interest rate is 10%. The machine's end-of-year salvage values over the next 5 years are presented in the table below. a) Calculate the marginal cost for the machine. [8 points) EOY Salvage Value at EOY Loss in Market Value Interest Rate Interest Marginal Costs 0 $53,000 1 $42.000 2 $37,000 3 $33,000 4 $30,000 5 $25,000 b) What is the economic life of the machine? Why? [2 point]