Question
The maintenance cost of a particular machine is zero the first year and increases by $200 per year for each subsequent year. The machine costs
The maintenance cost of a particular machine is zero the first year and increases by $200 per year for each subsequent year. The machine costs $2,000 and never has a scrap value. annual operating cost is $1,000 per year. If the interest rate is 10%, Calculate what life will result in a minimum cost of AE(i)?
Show all steps and equations, DO NOT use Excel to calculate
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To find the life that results in a minimum cost we need to calculate the present value of the costs for different lifetimes and choose the lifetime with the lowest present value Let n be the number of ...
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Step: 2
Step: 3
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Contemporary Engineering Economics
Authors: Chan Park
6th Edition
0134105591, 9780134105598
