What is the economic life of the defender

Assignment Help Operation Management
Reference no: EM132150535

A construction company is considering replacing and old inefficient compactor which has a current market of $10.000. The old equipment has 4 years left of service life with market value going down by $1800/year. The annual operating cost of the old compactor is $6, 000/year for the first year. To continue using the old compactor for subsequent years, the operating cost will rise by $350/year. The manager reports that new type of compactors can be bought for $11, 500 with service life of 4 years, Over its service life, the compactor, in comparison to the old one, will reduce the annual cost of operation and maintenance to $6, 000 year. The market value of the new compactor will decrease by $2, 000/year for each year of the remaining service life. The company's MARR is 10%.

a. What is the economic life of the Defender?

b. Knowing that the economic life of the Challenger is 4 years, should the old compactor replaced now?

Please do not use Excel to solve this problem.

Reference no: EM132150535

Questions Cloud

Determining factor of the analysis of income statement : According to Bajkowski, management is a big determining factor of the analysis of an income statement.
What are the components of total compensation : What are the components of total compensation? Are no compensation rewards more attractive than compensation rewards?
What was the most difficult thing about apologizing : The Role of Humility in Leadership Everybody makes mistakes. What was the most difficult thing about apologizing?
Makes playing cards in several different styles : JokersRWild makes playing cards in several different styles, but a “standard” deck of cards is used for planning purposes. T
What is the economic life of the defender : A construction company is considering replacing and old inefficient compactor which has a current market of $10.000. What is the economic life of the Defender?
Retired auto mechanic hopes to open rustproofing shop : A retired auto mechanic hopes to open a rustproofing shop. Customers would be local new-car dealers.
Explain how the employment relationship may be terminated : Explain how the employment relationship may be terminated. Define “Just Cause” and give 3 examples.
Responses by integrating evidence through quotations : e sure to cite the text to support your responses by integrating evidence through quotations, paraphrases, or summaries.
Analyze sales dollars or sales units : How a manager evaluating the sales organization's effectiveness might reach different conclusions depending on whether they analyze sales dollars or sales units

Reviews

Write a Review

Operation Management Questions & Answers

  Strategy in the relevant geographies and market segments

Identify how these relationships affected Tesla Motor’s strategy in the relevant geographies and market segments.

  Benefits of group technology manufacturing system

List 5 benefits of group technology manufacturing system

  Explain why the charter applies to the by-laws

Explain why the Charter applies to the by-laws. Identify the specific Charter rights or freedoms that the by-laws may have infringed.

  Pros-cons of linking incentive pay to individual performance

What are the pros and cons of linking incentive pay to individual performance? How can organizations address the negatives?

  Assessment of applicable laws

A brief assessment of applicable laws or regulations that must be considered. Recommendations about how to implement the initiatives to remain compliant while positing the organization for success

  What challenges might be faced in implementing them

What challenges might be faced in implementing them? How can these challenges be addressed?

  Since everyone has the potential to be in a lesser position

Since everyone has the potential to be in a lesser position,

  Information technology helps in managing-manipulating

Information Technology helps in managing, manipulating, storing, regaining, sharing/communicating and transmitting small as well as large amounts of information

  Determine the break even points for the manufacturer

Determine the break even points for the manufacturer to decide which options to take.

  Explain consumer behavior on social media

Explain consumer behavior on social media. Understand the aspects of developing a social media plan.

  What is the bullwhip measure for the manufacturer

Consider a 3 firm supply chain consisting of a retailer, manufacturer, and a supplier. The retailers demand over an 8 week period was 100 units each of the first 2 weeks, 200 units each of the second 2 weeks, 300 units each of the third 2 weeks, and ..

  List at least three kinds of nonverbal differences you

list at least three types of nonverbal differences you might encounter when working with people from other cultures.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd