Question

For a replacement analysis, the cost of a challenger is $(10,000 + D8 × 100) and the current market value of the defender is $(2,000 + D8 x 50). Given that the MARR is 10% per year.The market values (MV) and the annual operating and maintenance costs (AOC) are listed as follows. (a)Find the economic life (minimum EUAC) of the challenger. (b) Find the most economical period to keep the defender before replacing by the challenger.

Fig: 1

Fig: 2

Fig: 3

Fig: 4