Question
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 ?$35,000 and replaced by a new pump. The purchase price of the replacement pump is ?$50,500. 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 8?%, ?(a) determine the economic life of the challenger and ?(b) determine when the defender should be replaced.
ia Question Help Problem 9-8 (algorithmic) 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 $35,000 and replaced by a new pump, The purchase price of the replacement pump is $50,500. 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 8%. (a) determine the economic life of the challenger and (b) determine when the defender should be replaced. Defender Challenger Year MV at EOY O&M Costs MV at EOY O&M Costs $24,500 S18,500 $43,000 21,500 21,500 35,500 $14500 17,500 20,500 8,500 24,500 28,000 27,500 5,500 20,500 23,500 Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per yearStep by Step Solution
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