C11 X for =C10*0.85 E F G H I J K L M Using the first item of equipment from the equipment list, perform a replacement analysis with the following assumptions: 1. Salvage value decreases by 15% every year. 2. Manufactuer's warranty will cover the first year of maintenance. 3. Maintenance will cost 2% of the intial cost in the second year and will increase 4.5% each year thereafter in an geometric gradient. 4. Operating expense for the machinery will be 1.5% of the initial cost for the first year and will increase on a 1.5% of the intial cost arithemtic gradient each year. 5. Assume 6.5% interest. Interest 6.5% SV decrease $ 8,361.71 Init cost maint $10,500.00 increase $ 131.73 EUAC of Maintenance cost cash flows PW of Operating EUAC of Operating Year Sum of PW EUAC of Maintenance PW of Salvage Value Capital Costs Cash Flow Maintenance Sum of PW $8,925.00 2 $7,586.25 $6,448.31 4 $5,481.07 $4,658.91 6 $3,960.07 $3,366.06 8 $2,861.15 $2,431.98 10 $2,067.18 $1,757.10 $1,493.54 $1,269.51 $1,079.08 $917.22 16 $779.64 $662.69 $563.29 EUAC Total $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 12 13 22 C11 X for =C10*0.85 E F G H I J K L M Using the first item of equipment from the equipment list, perform a replacement analysis with the following assumptions: 1. Salvage value decreases by 15% every year. 2. Manufactuer's warranty will cover the first year of maintenance. 3. Maintenance will cost 2% of the intial cost in the second year and will increase 4.5% each year thereafter in an geometric gradient. 4. Operating expense for the machinery will be 1.5% of the initial cost for the first year and will increase on a 1.5% of the intial cost arithemtic gradient each year. 5. Assume 6.5% interest. Interest 6.5% SV decrease $ 8,361.71 Init cost maint $10,500.00 increase $ 131.73 EUAC of Maintenance cost cash flows PW of Operating EUAC of Operating Year Sum of PW EUAC of Maintenance PW of Salvage Value Capital Costs Cash Flow Maintenance Sum of PW $8,925.00 2 $7,586.25 $6,448.31 4 $5,481.07 $4,658.91 6 $3,960.07 $3,366.06 8 $2,861.15 $2,431.98 10 $2,067.18 $1,757.10 $1,493.54 $1,269.51 $1,079.08 $917.22 16 $779.64 $662.69 $563.29 EUAC Total $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 12 13 22