Question
Two pumps are being considered for purchase and will be needed as a continuing requirement. The initial cost of the first pump is $5,600, and
Two pumps are being considered for purchase and will be needed as a continuing requirement. The initial cost of the first pump is $5,600, and it has a salvage value at the end of its 5 year life of $1,000.Maintenance cost is estimated to be $800 the first year and increase $50 per year to the end of its 5 year life. The other pump costs $6000 and has a salvage value at the end of 10-year life of $1800. Maintenance cost is $900 the first year and increase of $40 per year to the end of its 10 year life. If the company uses MARR of 9.0%, which one should the company buy using equivalent uniform annual cost analysis?
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