Question: I need the answer to question 2-44 but it involves question 2-43 which has an answer 2-43. An oil transfer pump which costs $1,000,000 is
2-43. An oil transfer pump which costs $1,000,000 is expected to have a 3 year life at which time it will have to be replaced with the same pump costing the same amount. Maintenance costs will increase each year. The cost per year is shown in the following table (including the purchase cost at Time 0). Assume the maintenance costs occur in the middle of each year and that each year is 1 year long. Use a 13%/annum interest rate. What is the uniform equivalent annual cost (UEAC) for the pump if we assume the UEAC occurs at the middle of each year? Year Cost 0 1,000,000 50,000 75,000 3 96,513 Ans: 500,000 2-44. What is the uniform equivalent annual cost (UEAC) for the pump in Problem 2-43 if we assume the maintenance costs and the UEAC occurs at the end of each year
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