Replacement Analysis Assignment | Homework For You
January 24th, 2020
Please show all hand calculations
Replacement Analysis (12 marks) A new bottle-capping machine costs $45,000 plus $3,000 for installation. The machine is expected to have a useful life of eight years with no salvage value at that time using a straight-line depreciation method. O&M costs are expected to be $3,500 in the first year, increasing by $2,200 each year thereafter. With a MARR of 11% what is the economic life of this machine and what is the EAC-Total at that time? Note: To save you some time EAC-Total for year 1 = $17,405 2 years at EAC-Total = $16,576. Get Finance homework help today