Question: VMIC Corp. 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

VMIC Corp. 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                                  $2500                          $4500

2                                  2400                            3600

3                                  2300                            3000

4                                  2550                            2600

5                                  2900                            2700

6                                  3400                            3500

7                                  4000                            4000

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

(b) What is the minimum cost life of the challenger?

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

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