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Problem 3: A company has a four-year-old pump that was initially purchased for $65,000. This pump can be kept in service for an additional four
Problem 3: A company has a four-year-old pump that was initially purchased for $65,000. This pump can be kept in service for an additional four years, or it can be sold for $35,000 and replaced by a new pump. The projected MVs and operating and maintenance costs over the four-year planning horizon are as follows. Assuming the MARR is 10%, determine the economic life of the defender. You may need the following formula to solve the problem: TCk(i%)=MVk1MVk+iMVk1+EkEUACk=[j=1kTCj(P/F,10%,j)](A/P,10%,k)(P/F,i%,N)=(1+i)N1;(A/F,i%,N)=(1+i)N1i;(A/P,i%,N)=(1+i)N1i(1+i)N; Problem 3: A company has a four-year-old pump that was initially purchased for $65,000. This pump can be kept in service for an additional four years, or it can be sold for $35,000 and replaced by a new pump. The projected MVs and operating and maintenance costs over the four-year planning horizon are as follows. Assuming the MARR is 10%, determine the economic life of the defender. You may need the following formula to solve the problem: TCk(i%)=MVk1MVk+iMVk1+EkEUACk=[j=1kTCj(P/F,10%,j)](A/P,10%,k)(P/F,i%,N)=(1+i)N1;(A/F,i%,N)=(1+i)N1i;(A/P,i%,N)=(1+i)N1i(1+i)N
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