Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 5

In a separate conversation, the line manager told you to not plan for a rebuild after 6000 hours, because the pump will be replaced after a total of 10,000 hours of operation. The line manager wants to know what the base AOC in year 1 can be to make the ESL 6 years. He also told you to assume now that the 15% growth rate applies from year 1 forward. How does this base AOC value compare with the rebuild cost after 6000 hours