Your facility has a 400 Hz three-phase generator that produces power for the avionics equipment in a test stand. When it becomes too costly to maintain, an exact replacement is purchased. The generator has a useful life of 10 years, costs $19,000 to purchase, plus $3,000 for delivery and installation, and depreciates at a rate of 13% per year. The generator costs $10,000 a year to operate and maintain in year 1. Thereafter, this cost increases by $1,500 per year. Your facility uses a MARR of 6%. When should the generator be replaced? Show your work and explain your

Your facility has a 400 Hz three-phase generator that produces power for the avionics equipment in a test stand. When it becomes too costly to maintain, an exact replacement is purchased. The generator has a useful life of 10 years, costs $19,000 to purchase, plus $3,000 for delivery and installation, and depreciates at a rate of 13% per year. The generator costs $10,000 a year to operate and maintain in year 1. Thereafter, this cost increases by $1,500 per year. Your facility uses a MARR of 6%. When should the generator be replaced? Show your work and explain your

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Your company has a 1,000,000.00 loan for a new security system it just bought. The annual payment is 88,827.433 and the interest rate is 8% per year for 30 years. Your company decides that it can afford to pay 100,000 per year. After how many payments (years) will the loan be paid off?
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