Question
A truck can be purchased for $55,000. Annual O&M costs are expected to increase $1,800 every year, with a 1st year O&M cost of $4,000.
A truck can be purchased for $55,000. Annual O&M costs are expected to increase $1,800 every year, with a 1st year O&M cost of $4,000. (MARR = 32%, and planning horizon is 10 years) The compressor salvage value for a given period t, is calculated based on the following equation: Salvage value (t) = $30,000- $3,000 * t a) Find the Optimum Replacement Interval for this Equipment (SOLVE IN EXCEL) b) Find the Optimum Replacement Interval for this Equipment if the O&M costs is decreased to $1,700/yr. What is your conclusion? (SOLVE IN EXCEL) c) Find the Optimum Replacement Interval for this Equipment if the initial cost is reduced to $52,000. What is your conclusion? (independent of part b)(SOLVE IN EXCEL)
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