Contemporary Engineering Economics 6th Edition by Chan Park

تمرين 46

Repeat Problem using the AE criterion.
Problem
An existing asset that cost $16,000 two years ago has a market value of $12,000 today, an expected salvage value of $2,000 at the end of its remaining useful life of six more years, and annual operating costs of $4,000. A new asset under consideration as a replacement has an initial cost of $10,000, an expected salvage value of $4,000 at the end of its economic life of three years, and annual operating costs of $2,000. It is assumed that this new asset could be replaced by another one identical in every respect after three years at a salvage value of $4,000, if desired. Use a MARR of 11%, a six-year study period, and PW calculations to decide whether the existing asset should be replaced by the new one.