Engineering Economic Analysis

r What Is the Basic Comparison? 413 If Retired at Endof Year n Years of Remaining Life, n Estimated Salvage Value (5) at End of ...

I .I .-- -.. -- ..,. --..------- 414 REPLACEMENTANALYSIS An economic analysis is to be made to detennine whether existing (def ...

rn I WhatIs the Basic Comparisori?^415 r t r I Year,n o 1 :.2 3 4 5 Overhaul Cost $4000 o o o o o Maintenance Cost Margin81 ...

416 REPLACEMENTANALYSIS l I A laptop word processor model SK-30 was purchased 2 years ago for $1600; it has been depre- ciated b ...

--- ........-..-. What Is the Basic Comparison? 417 arbitrarily subtract the disposition cost of the defender from the first cos ...

.. ... .h ___ _ U ,I 418 REPLACEMENTANALYSIS Looking at this second case from anopportunity costperspective, we use an annual co ...

--. --- What Is the Basic Comparison? 419 or somewhere between the lives of the defender and challenger. The essential principle ...

l 420 REPLACEMENT ANALYSIS technological advances in assets targeted for replacement. This part of the decision process is much ...

I, . t I J I After-Tax Replacement Analysis 421 J -. ..' -.~-~-~ cS9~UTIQ~j The after-tax marginal cost of ownershipwill involve ...

422 REPLACEMENTANALYSIS Total Marginal Costs Due to Ownership l'lotice that the total marginal cost for each year is thu,chdiffe ...

r I I r- I ~ After-Tax Replacement Analysis 423 of the defender use the following steps: Assume you are selling the defender no ...

-, 424 REPLACEMENTANALYSIS Thus if we sell at the outset(n=0) we have: (Sell) Year,n o Before-Tax Cash Flow +8000 "Depreciation ...

After-TaxReplacement Analysis 425 Straight-line Depreciation $400 400 o o o *If sold for $200, there would be a $600 loss on dis ...

"I 426 REPLACEMENTANALYSIS Solve Example 13-12 by computing the rate of return on the difference between alternatives. In Exampl ...

. -....-.......... .- -... .. ... -. T I I After-Tax ReplacementAnalysis 427 Since these lives are the same, a present or future ...

Regarding the market value data in this problem, it should be pointed out that the initial decrease of $50,000in Year 1is not Un ...

Summary SPREADSHEETSAND REPLACEMENTANALYSIS Spreadsheets are obviously useful in nearly all after-tax calculations. However, the ...

This chapter has presented three distinctly different replacement analysis techniques which are all relevant and appropriate dep ...

-- --- ...- T II ~ t f PROBLEMS F ' Problems^431 ., i li- f 13-2 It 13-1 Typically there are two alternatives in a replace- ...

. ... ..- -- ... .--- 432 REPLACEMENTANALYSIS I 13-9 The Clap Chemical Company needs a large insulated stainless s~eeltank.for t ...