Canada's Wonderland has decided to carry out an analysis to determine when one of its roller coasters should be replaced. The existing roller coaster was purchased 25 years ago for $715,000. The costs of operating and maintaining this ride for a 5-year study period are predicted to be $70,000 in year 1 and would increase by $1,300 each year thereafter (i.e. $71,300 in year 2, $72,600 in year 3, etc.) Canada's Wonderland uses a MARR of 10% for roller coaster projects. (a) If the roller coaster loses value at a rate of 7% per year, what is the salvage value at the end of the study period? Select between Part (a) options 1 to 4. (b) What is the EAC for operating & maintenance costs (O&M) after 4 years in the study period? Select between Part (b) options 1 to 4. (c) Supposing the salvage value after 2 years in the study period is $100,773, what is the EAC for capital costs after 2 years in the study period? Select between Part (c) options 1 to 4. (d) What is the economic remaining life of the roller coaster (i.e. in the study period)? Select between Part (d) options 1 to 4. Select 4 correct answer(s) Select 4 correct answer(s) |Part (a) Option 1: Salvage value = $81,058 Part (a) - Option 2: Salvage value = $497,417 | Part (a) Option 3: Salvage value = $0 Part (a) - Option 4: Salvage value = $464,750 | Part (b) Option 1: EAC O&M year 4 = $75,200 Part (b) - Option 2: EAC O&M year 4 = $116,125 Part (b) Option 3: EAC O&M year 4 = $721,405 Part (b) Option 4: EAC O&M year 4 = $71,796 Part (c) Option 1: EAC Capital year 2 = $17,573 Part (c) - Option 2: EAC Capital year 2 = $363,989 Part (c) - Option 3: EAC Capital year 2 = $19,147 Part (c) - Option 4: EAC Capital year 2 = $19,807 | Part (d) - Option 1: replace immediately Part (d) - Option 2: 2 years Part (d) - Option 3: 3 years Part (d) - Option 4: 4 years