A piece of production equipment is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are a used piece of equipment (E1 ) and a new automated model (E2 ). The economic estimates for each are shown in the accompanying table. The MARR is 18 % per year

a) Which alternative is preferred, based on the repeatability assumption?

-The AW of the alternative E1 is

-The AW of the alternative E2 is

-Which alternative is preferred? E1 or E2

b) Which alternative is preferred, based on the coterminated assumption with a five-year study period and an imputed market value for the Alternative E2 ?

-The AW of the alternative E2 is

-Which alternative is preferred? E1 or E2

Capital investment Annual expenses Useful life (years) Market value (at the end of useful life) Alternative E1 E2 $15,000 $64,000 $14,000 $10,000 5 20 $7,500 $14,000 Capital investment Annual expenses Useful life (years) Market value (at the end of useful life) Alternative E1 E2 $15,000 $64,000 $14,000 $10,000 5 20 $7,500 $14,000