Determine the marginal cost to extend service

Reference no: EM132168970

Question: A drill press was purchased 2 years ago for $40,000. The press can be sold for $15,000 today, or for $12,000, $10,000, $8000, $6000, $4000, or $2000 at the ends of each of the next 6 years. The annual operating and maintenance cost for the next 6 years will be $2700, $2900, $3300, $3700, $4200, and $4700. Determine the marginal cost to extend service for each of the next 6 years if the MARR is 12%. If a new drill press has an EAC of $7000, when should the drill press be replaced?

Reference no: EM132168970

Questions Cloud

Describe an example in a replacement analysis scenario : Describe an example in a replacement analysis scenario where the replacementis being considered due to altered requirements.

The benefits of the swot results for this organization : In what ways do you agree or disagree with your colleague on which parts of a SWOT analysis provide the greatest value for this organization.

Which are the relevant costs for the old machine : A pulpwood-forming machine was purchased and installed 8 years ago for $45,000. The declared salvage value was $5000, with a useful life of 10 years.

When should the drill press be replaced : A machine that has been used for one year has a salvage value of $10,000 now, which will drop by $2000 per year. The maintenance costs for the next 4 years.

Determine the marginal cost to extend service : A drill press was purchased 2 years ago for $40,000. The press can be sold for $15,000 today, or for $12,000, $10,000, $8000, $6000, $4000, or $2000.

Briefly describe the primary role of a literature review : Briefly describe the primary role of a Literature Review in a "quantitative" research study and the primary role of a Literature Review.

Find the minimum euac for the given vehicle : A vehicle has a first cost of $20,000. Its market value declines by 15% annually. It is used by a firm that estimates the effect of older vehicles.

What life of the given machinery has the lowest euac : The plant manager may purchase a piece of unusual machinery for $10,000. Its resale value after 1 year is estimated to be $3000. Because the device is sought.

How to determine the truck economic life : Demonstrate how one would calculate the economic life of a truck costing $30,000 initially, and at the end of this and each following year (y) costing OMRy.

User Account

All Pages