Question: SHOJ Enterprises has asked you to look at the following data. The interest rate is 10%. After considering the data, answer questions (a)-(c). Marginal EUAC

SHOJ Enterprises has asked you to look at the following data. The interest rate is 10%. After considering the data, answer questions (a)-(c).  

Marginal                                  EUAC If

Cost Data                                Kept n Years

Year, n                                    Defender                                 Challenger

1                                              $3000                                      $4500

2                                              3150                                        4000

3                                              3400                                        3300

4                                              3800                                        4100

5                                              4250                                        4400

6                                              4950                                        6000

(a) What is the lowest EUAC of the defender?

(b) What is the economic life of the challenger?

(c) When, if at all, should we replace the defender with the challenger?

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