Problem 4 The following table shows the marginal costs for the next six years of a machine that your company is considering to replace. Using an interest rate of 12% calculate the EUAC of keeping the machine for another 1, 2, 3, 4, and 5 years, to determine the economic life (minimum cost life) of the machine. Show complete work and explanation. Year Marginal Cost, $ 1 2 3 10,000 9,200 8,500 4 5 6 10,500 11,200 12,000

Problem 4 The following table shows the marginal costs for the next six years of a machine that your company is considering to replace. Using an interest rate of 12% calculate the EUAC of keeping the machine for another 1, 2, 3, 4, and 5 years, to determine the economic life (minimum cost life) of the machine. Show complete work and explanation. Year Marginal Cost, $ 1 2 3 10,000 9,200 8,500 4 5 6 10,500 11,200 12,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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