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A city water and wastewater department has a four year old sludge pump that was initially purchased for $90400. This pump can be kept in
A city water and wastewater department has a four year old sludge pump that was initially purchased for $90400. This pump can be kept in service for an additional four years, or it can be sold for $51010 and replaced by a new pump. The purchase price of the replacement pump is $101840. The projected market values and operating and maintenance costs over four year planning horizon are shown in the table that follows. Assuming the MARR is 11% a) (4 points) determine the economic life of the defender and the annual cost of defender in its economic life. b) (4 points) determine the economic life of the challenger and the annual cost of challenger in its economic life. c) (3 points) determine when the defender should be replaced defender defender MV at end Operation & year of year maintenance costs 11 46930 16820 2 41300 18170 3 36350 19990 32350 21390 challenger challenger MV at end Operation & of year maintenance costs 81500 12620 73400 13760 54400 15140 28900 15900 4
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