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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
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 $37,000 and replaced by a new pump. The purchase price of the replacement pump is $49,000. 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 Year MV at EOY O&M Costs $24,500 $19,500 21,500 22,000 18,500 24,500 15,500 27,000 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. Challenger MV at EOY O&M Costs $40,500 $13500 33,500 16,000 26,500 18,500 19,500 21,000 AWN- a. The economic life of the challenger is year(s). (Round to the nearest whole number.) b. The defender should be replaced
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