Engineering Economic Analysis

Arithmetic Gradient 103

two components:

,100

t

0~1--'-'---'-2---'---3~4

200

t

400

TI

200

t

300

J

A=100 +100(AjG, 6%, 4)= 100+ 100(1.427) ..'$242.70

:: .;;;, :iiiiii ~ -",.,,-~II!! ...~:;;~J, i

The equiyalent unifonn annualmafntenan,ceCosti$$242.70.

-- :.0-_ -..-

A textile mill in India installed a number of new looms. It is expected that initial maintenance

costs and expenses for repairs will be high but will then decline for several years. The projected

cost is:

Maintenance and

Year Repair Costs (rupees)

1 24,000

2 18,000

3 12,000

4 6,000

What is the projected equivalent annual maintenance and ,repair cost if interest is 1O%?

=

The projecte~fcashflowis not in the fonn of the arithmetic gradient factors.Both factors were

derived for an increasing gradient overtime. The factors cannot be uSed directly for a decpning

;II

.

.

I