A new Rs. 40, 00,000 machines has just been installed in a plant. It will have no salvage value when it is removed. The plant manager has asked you to estimate the economic service life of the machine. He estimates that annual maintenance cost will be Rs. 2, 50,000 in first year and increase by 10% per year. What service life will result in lowest equivalent uniform annual cost if MARR is 15%? (4589.55)

A new Rs. 40, 00,000 machines has just been installed in a plant. It will have no salvage value when it is removed. The plant manager has asked you to estimate the economic service life of the machine. He estimates that annual maintenance cost will be Rs. 2, 50,000 in first year and increase by 10% per year. What service life will result in lowest equivalent uniform annual cost if MARR is 15%? (4589.55)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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