3. Big-J Construction Company, Inc. (Big-J CC) is conducting a routine periodic review of existing field equipment. They use a MAAR of 20%. This includes a replacement evaluation of a paving machine now in use. The machine was purchased 5 years ago for $200,000, The paver's current market value is $65,000, and yearly operating and maintenance costs are as follows. Maintenance Cost in Year n 12,000 18,000 20,000 25,000 30,000 Year, n 1 235 Operating Cost in Year n 17,000 20,000 25,000 30,000 35,000 Market Value If Sold In Year n 50,000 40,000 35,000 30,000 25,000

3. Big-J Construction Company, Inc. (Big-J CC) is conducting a routine periodic review of existing field equipment. They use a MAAR of 20%. This includes a replacement evaluation of a paving machine now in use. The machine was purchased 5 years ago for $200,000, The paver's current market value is $65,000, and yearly operating and maintenance costs are as follows. Maintenance Cost in Year n 12,000 18,000 20,000 25,000 30,000 Year, n 1 235 Operating Cost in Year n 17,000 20,000 25,000 30,000 35,000 Market Value If Sold In Year n 50,000 40,000 35,000 30,000 25,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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