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A construction equipment for Tech Builders Inc has a first cost of $25,000 and the following salvage values and annual operating costs: t s(t) Op.
A construction equipment for Tech Builders Inc has a first cost of $25,000 and the following salvage values and annual operating costs:
| t | s(t) | Op. Cost (t) |
| 1 | $ 22000 | $ 10000 |
| 2 | 21500 | 10500 |
| 3 | 20000 | 11000 |
| 4 | 19500 | 11500 |
| 5 | 10000 | 12000 |
| 6 | 0 | 12500 |
Use a MARR of 10% and determine the EAC of keeping the equipment for all possible years and determine the optimal economic life of the equipment.
Hint: EAC at year 3 = 14,479.
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