Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A city water and waste water department has a four-year-old sludge pump that was initially purchased for $65,000. This pump can be kept in service
A city water and waste water department has a four-year-old sludge pump that was initially purchased for $65,000. This pump can be kept in service for an additional four years, or it can be sold for $34,000 and replaced by a new pump. The purchase price of the replacement pump is $52,000. The projected MVs and operating and maintenance costs over the four-year planning horizon are shown in the table that follows. Assuming the MARR is 10%, (a) determine the economic life of the challenger and (b) determine when the defender should be replaced Defender Challenger Year MV at EOY OXM Costs MV at EOY O&M Costs $23.000 $19.000 $38,500 $14000 20,000 21,000 31.500 16.000 17.000 23,000 24,500 18.000 14,000 25,000 17.500 20.000 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. a. The economic life of the challenger is year(s) (Round to the nearest whole number.) b. The defender should be replaced
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started