7.5 Consider a machine that costs $5000 to replace and its maintenance cost is $500 peryear. The expected failure time of the machine is five years.(a) Find the optimal time to replace the machine.(b) Generate multicriteria alternatives for times t = 2, 3, 4, 5, 6 years.%3D(c) Rank the alternatives generated in part (a) using an additive utility function, wherethe weights of importance for the two normalized objectives are 0.7 and 0.3.respectively.

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Answered: 7.5 Consider a machine that costs $5000…

7.5 Consider a machine that costs $5000 to replace and its maintenance cost is $500 per year. The expected failure time of the machine is five years. (a) Find the optimal time to replace the machine.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

7.5 Consider a machine that costs $5000 to replace and its maintenance cost is $500 per
year. The expected failure time of the machine is five years.
(a) Find the optimal time to replace the machine.
(b) Generate multicriteria alternatives for times t = 2, 3, 4, 5, 6 years.
%3D
(c) Rank the alternatives generated in part (a) using an additive utility function, where
the weights of importance for the two normalized objectives are 0.7 and 0.3.
respectively.

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