Big-J Construction Company, Inc. (Big-J CC) isconducting a routine periodic review of existingfield equipment. They use a MAAR of 20%. Thisincludes a replacement evaluation of a pavingmachine now in use. The machine was purchased3 years ago for $200,000, The pavers current mar-ket value is $120,000, and yearly operating andmaintenance costs are as follows.Operating Maintenance MarketValueYear, Cost in Cost in if SoldnYearnYearnin Yearn1 $15,000 $ 9,000 $85,0002 15,000 10,000 65,0003 17,000 12,000 50,0004 20,000 18,000 40,0005 25,000 20,000 35,0006 30,000 25,000 30,0007 35,000 30,000 25,000 Data for a new paving machine have been ana-lyzed. Its most economic life is at 8 years, witha minimum EUAC of $62,000. When should theexisting paving machine be replaced?
Big-J Construction Company, Inc. (Big-J CC) isconducting a
Solution for problem 13-37 Chapter 13
Engineering Economic Analysis | 12th Edition
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