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 answers) Select 4 correct answers) 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 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 answers) Select 4 correct answers) 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
