Calculate and compare the equivalent annual costs

Reference no: EM131049759

QUESTIONS

1. Calculate and compare the equivalent annual costs of (a) overhauling and operating the Vital Spark for 12 more years, and (b) buying and operating the proposed replacement vessel for 20 years. What should Mr. Handy do if the replacement's annual costs are the same or lower?

2. Suppose the replacement's equivalent annual costs are higher than the Vital Spark's. What additional information should Mr. Handy seek in this case?

Reference no: EM131049759

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