A machine has a first (capital) cost of $12,000. The repair costs are covered by the...

 

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A machine has a first (capital) cost of $12,000. The repair costs are covered by the warranty in year 1, then they increase by $450 per year. Assume an interest rate of 10%. (a) Calculate the EUAC for the first 10 years of the machine's use, rounding to the nearest dollar. (b) Identify the minimum EUAC for this machine, and the year it occurs. (c) Based on this value, according to the techniques we have learned, how many years should the machine be used before it is sold? A machine has a first (capital) cost of $12,000. The repair costs are covered by the warranty in year 1, then they increase by $450 per year. Assume an interest rate of 10%. (a) Calculate the EUAC for the first 10 years of the machine's use, rounding to the nearest dollar. (b) Identify the minimum EUAC for this machine, and the year it occurs. (c) Based on this value, according to the techniques we have learned, how many years should the machine be used before it is sold?

Answer rating: 100% (QA)

To calculate the EUAC Equivalent Uniform Annual Cost for the first 10 years of the machines use we n... View the full answer