2. For a planning horizon of 4 years, when should the defender be replaced given the...

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2. For a planning horizon of 4 years, when should the defender be replaced given the information below for the Challenger and the Defender. The replacement should be made when the Total Marginal Cost of the Challenger is less than the Defender. Confirm this by considering the replacement possibilities (Defender 0 years, Challenger 4 years; Defender 1 year, Challenger 3 years etc.) as demonstrated in the lecture. MARR=10% Challenger Year MV Loss in Value Cof C O&M TC $ 50,000 40,000 $ 10,000 32,000 $ $ 5,000 $ 28,000 4,000 $ 13,000 17,500 $ $ $ $ 8,000 29,500 24,000 $ 16,000 $ $ 3,200 $ 8,000 8,000 3 19,500 30,700 $ 2,400 $ 22,500 32,900 Defender Year MV Loss in Value Cof C O&M TC $ $ 35,000 28,000 $ 21,000 $ 17,000 $ 13,000 $ 3,500 $ 2,800 $ $ 1 7,000 $ 16,500 $ 27,000 7,000 18,000 27,800 2,100| $ $ 3. 4,000 24,000 $ 30,100 4 4,000 1,700 $ 27,500 33,200 2. For a planning horizon of 4 years, when should the defender be replaced given the information below for the Challenger and the Defender. The replacement should be made when the Total Marginal Cost of the Challenger is less than the Defender. Confirm this by considering the replacement possibilities (Defender 0 years, Challenger 4 years; Defender 1 year, Challenger 3 years etc.) as demonstrated in the lecture. MARR=10% Challenger Year MV Loss in Value Cof C O&M TC $ 50,000 40,000 $ 10,000 32,000 $ $ 5,000 $ 28,000 4,000 $ 13,000 17,500 $ $ $ $ 8,000 29,500 24,000 $ 16,000 $ $ 3,200 $ 8,000 8,000 3 19,500 30,700 $ 2,400 $ 22,500 32,900 Defender Year MV Loss in Value Cof C O&M TC $ $ 35,000 28,000 $ 21,000 $ 17,000 $ 13,000 $ 3,500 $ 2,800 $ $ 1 7,000 $ 16,500 $ 27,000 7,000 18,000 27,800 2,100| $ $ 3. 4,000 24,000 $ 30,100 4 4,000 1,700 $ 27,500 33,200

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Optimum replacement We have to calculate Annual worth of challenger and defender for different years ... View the full answer