A company needs to determine the optimal replacement policy for a current 1-year-old machine over the...

 

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A company needs to determine the optimal replacement policy for a current 1-year-old machine over the next 4 years (n = 4). The company requires that a 6-year-old machine be replaced. The cost of a new machine is $100,000. The following table gives the data of the problem. Age, (yr) Revenue, r(t) ($) Operating cost, c(1) ($) Salvage value, s(t) ($) 0 20,000 200 1 19,000 600 80,000 23456 18,500 1200 60,000 17,200 1500 50,000 15,500 1700 30,000 14,000 1800 10,000 12,200 2200 5000 A company needs to determine the optimal replacement policy for a current 1-year-old machine over the next 4 years (n = 4). The company requires that a 6-year-old machine be replaced. The cost of a new machine is $100,000. The following table gives the data of the problem. Age, (yr) Revenue, r(t) ($) Operating cost, c(1) ($) Salvage value, s(t) ($) 0 20,000 200 1 19,000 600 80,000 23456 18,500 1200 60,000 17,200 1500 50,000 15,500 1700 30,000 14,000 1800 10,000 12,200 2200 5000