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As a procurement engineer, you're asked to look into replacing an old multi-tower crane system used for high rise construction with a newer model. The
As a procurement engineer, you're asked to look into replacing an old multi-tower crane system used for high rise construction with a newer model. The current crane's present worth is $1,000,000 and forecasted market valuations indicate a drop in it's value by 15% per year. If kept the defender crane system should be overhauled, with a cost of $150,000 and operation cost of $175,000 for the first year and shall increase by 27% afterwards. Alternatively, the other option you have is a newer model with 10 years of service life, costs $1,500,000 with O \& M costs of $130,000 for the 1tt year and will increase by 33% for subsequent years. The challenger's crane market value will drop 22% per year through its service life. Given that your company's MARR is 12%, prepare a decision report including: A/ Plot total AE cost vs useful life for the defender \& the challenger for 10 years. B/ Find the economic lives of the defender \& the challenger. C/ Determine if/when the defender should be replaced
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