11.32 The estimated future market values and M&O costs for an in-place backup generator at MediCare...
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11.32 The estimated future market values and M&O costs for an in-place backup generator at MediCare Hospital and a possible replacement are shown below. Mrs. Jamison, Hospital Director, told you that she is interested only in what happens over the next 3 years. If the current generator is to be re- placed, it must be done now or kept in-place for the 3 years. Using an interest rate of 10% per year and a 3-year study period, determine whether or not the replacement is economically advantageous now. In-Place Replacement Market Market Year Value, $ M&O Cost, $ Value, $ M&O Cost, $ 0 40,000 80,000 1 32,000 -55,000 65,000 -37,000 2 23,000 -55,000 39,000 -37,000 3 11,000 -55,000 20,000 -37,000 4 19,000 -38,000 5 11,000 -39,000 11.32 The estimated future market values and M&O costs for an in-place backup generator at MediCare Hospital and a possible replacement are shown below. Mrs. Jamison, Hospital Director, told you that she is interested only in what happens over the next 3 years. If the current generator is to be re- placed, it must be done now or kept in-place for the 3 years. Using an interest rate of 10% per year and a 3-year study period, determine whether or not the replacement is economically advantageous now. In-Place Replacement Market Market Year Value, $ M&O Cost, $ Value, $ M&O Cost, $ 0 40,000 80,000 1 32,000 -55,000 65,000 -37,000 2 23,000 -55,000 39,000 -37,000 3 11,000 -55,000 20,000 -37,000 4 19,000 -38,000 5 11,000 -39,000
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