A company wants to determine the optimal replacement policy for its equipment. New equipment costs $10,000....
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A company wants to determine the optimal replacement policy for its equipment. New equipment costs $10,000. The company does not keep their equipment longer than 2 years and has estimated the annual operating costs and trade-in values for equipment during each of the 2 years as: Age in years 0 to 1 1 to 2 Operating Cost $5,000 $7,000 Trade-in Value $8,000 $6,000 What is the net replacement cost at year 3 if the company used the equipment for two years from year 1? c. $11,000 d. $9,000 a. $16,000 b. $14,000 A company wants to determine the optimal replacement policy for its equipment. New equipment costs $10,000. The company does not keep their equipment longer than 2 years and has estimated the annual operating costs and trade-in values for equipment during each of the 2 years as: Age in years 0 to 1 1 to 2 Operating Cost $5,000 $7,000 Trade-in Value $8,000 $6,000 What is the net replacement cost at year 3 if the company used the equipment for two years from year 1? c. $11,000 d. $9,000 a. $16,000 b. $14,000
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Related Book For
Spreadsheet Modeling & Decision Analysis A Practical Introduction to Management Science
ISBN: 978-0324656633
5th edition
Authors: Cliff T. Ragsdale
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