ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
Chapter 13, Problem 3P
To determine
To calculate: the minimum EUAC for the machine and its economic life
Expert Solution & Answer
Answer to Problem 3P
Minimum EUAC is 7016.99 or 7017 and the economic life is 6 years
Explanation of Solution
First cost of machine =
Market value declines =
Firm’s MARR =
Market value =
There is increase of
Assume the machine is kept for n years.
Minimum EUAC is 7016.99 or 7017 and the economic life is 6 years.
Economics Concept Introduction
Introduction: Equivalent Universal Annual Cost is considered the cost, which is used on assets’ operating, owing and maintaining the asset over the life of an asset. EAC is used by the company for budgeting decision of capital, as it helps in comparing the lifespan of all the assets available in the company.
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Chapter 13 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 13 - Prob. 1QTCCh. 13 - Prob. 2QTCCh. 13 - Prob. 3QTCCh. 13 - Prob. 4QTCCh. 13 - Prob. 5QTCCh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5P
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