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The EUAC of the challenger for an economic life of 8 years is $7,200. The marginal cost of the defender is provided in table below.

The EUAC of the challenger for an economic life of 8 years is $7,200. The marginal cost of the defender is provided in table below. Determine when the defender should be replaced (to closest whole number of years).

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Suggestion: The challenger EUAC can be assumed here to be $7200 for each of its 8 years.

5 Year Marginal Cost, 6.500 7.000 7 4 8,000 7,500 8 8.200

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