A city water and waste water department has a four year old sludge pump that was initially purchased for $50,000 This pump can be kept in service for an additional four years, or it can be sold for $30,000 and replaced by a new pump The purchase price of the replacement pump is $50,000 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 , answer the following questions a Calculate the marginal costs and EUAC values of the defender and challenger, respectively b The economic lifetime of the challenger is years c Are additional calculations necessary before making the replacement decision c The defender should be replaced when Defender Challenger 9 YearMV at EOY O M CostsMV at EOY $25,000 21,000 17,000 14,000 $18,400 20,900 23,400 25,900 $40,000 32,000 24,000 16,000 O M Costs $11,500 14,000 16,500 19,000

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A city water and waste-water department has a four-year-old sludge pump that was initially purchased for $50,000. 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 $50,000. This pump can be kept in service for an additional four years, or it can be sold for $30,000 and replaced by a new pump. The purchase price of the replacement pump is $50,000. 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%, answer the following questions.

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a. Calculate the marginal costs and EUAC values of the defender and challenger, respectively.

b. The economic lifetime of the challenger is _ years.

c. Are additional calculations necessary before making the replacement decision?

c. The defender should be replaced when?

Defender Challenger 9 YearMV at EOY O&M CostsMV at EOY $25,000 21,000 17,000 14,000 $18,400 20,900 23,400 25,900 $40,000 32,000 24,000 16,000 O&M Costs $11,500 14,000 16,500 19,000