For the first problem Unequal lives review quiz problems what is the EUAC of the
ID: 2618269 • Letter: F
Question
For the first problem Unequal lives review quiz problems what is the EUAC of the defender? Answer should be -$15383 For the first problem unequal lives review problems what is the EUAC of the challenger? Answer should be-$17033 What decision would you make based on the above calculations answer should be Keep defender In the problem on co-termination, what is the minimum EUAC?Answer should be $27984 How many years would you keep the Defender?Answer should be 2 Problem in picture. Please answer all parts using excel if possible. View Help Tell me what you want to deo er to stay in Protected View. Enable Editing Unequal Lives Replacement Analysis 1. Given the following information for the challenger and defender, should the existing robot be replaced? Assume that a robot will be needed for and indefinite period and MARR: 25%. Defender Current MV Annual Expenses $1400 in year 1 Annual Expenses $1000 in year 1 Challenger 40,200Investment S 56,500 Increasing by 8%/year Increasing by $150/year 10 Useful Life MV at end of life Useful life MV at end of life7,000 $1,500 2. For a planning horizon of 4 years, when should the defender be replaced given the information below for the Challenger and the Defender. The replacement should be made when the Total Marginal Cost of the Challenger is less than the Defender. Confirm this by considering the replacement possibilities (Defender O years, Challenger 4 years; Defender 1 year, Challenger 3 years etc.) as demonstrated in the lecture. MARR:00% Challenger YearMV 0 Loss in Value CofC TC is 50,000 40,000 10,000 5,000 13,000 28,000 32,000$ 8,000 4,00017,500 29,500 S 24,000 8,000 3,200 19,500 $ 30,700 4 $ 16,000$ 8,000 2,400 22,500 32,900 Defender Year TC Loss in Value Cof C O&M; MV $ 35,000 28,000 7,000 3,500 16,500 $ 27,000 $ 21,000 $ 7,000 2,800 18,000 27,800 $ 17,000 ls_ 4,000.$ 2,100. s 24,000-s-30, 100 s 13,000 4,000 1,700 27,500 33,200
Explanation / Answer
Soln : We can calculate the same by spreading the cost on yearly basis, and understand the equivalent uniform annual cost`
For defender:
EUAC = 40200*(A/P,25%,6) +(18346.78 +1500) *(A/F,25%,6 )
EUAC = 56500*(A/P,25%,10) +1000+ 150*(A/G,25%,10) -7000 *(A/F,25%,10 ) = 17033
As the cost of defender seems to be less than challenger , hence we will prefer the defender and do not replace it.
Year 0 1 2 3 4 5 6 MV -40200.00 Annual expenses 1400.00 1512.000 1632.960 1763.597 1904.685 2057.059 Value at end -1500.00 FV of annual expenses at 25% 4272.46 3691.41 3189.38 2755.62 2380.86 2057.06 Sum of FV of annual expenses 18346.78