Determine the optimum replacement interval

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The engineering firm is considering to keep the crane for future projects. The cost of the crane is the one described in problem 2 (including transportation costs). Its market value at the end of year one will be $300,000 decreasing by 15% every year to minimum of $100,000. The crane operating costs will be a gradient series of $25,000. The maintenance costs will be equal to 20% of the operating costs. MARJR. is 10%. Determine the optimum replacement interval.

Reference no: EM131092005

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