ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Chapter 13, Problem 38P

(a)

To determine

To find: The new asset’s minimum cost life.

(b)

To determine

To find: The life of the asset when it should be replaced with the new asset.

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Example: Consider a machine that costs 20000 TL and has a useful life of 5 years. Let the scrap value be 4000 TL at the end of 5 years. Let the annual operating and maintenance cost be 500 TL. The business expects to earn 5000 TL/year thanks to this machine. If l=10%, buy this machine?
A restaurant sells pizza at a rate of $14.69/slice. Expenses for the restaurant include raw material for pizza at $9.69 per slice, $157.00 as monthly rental and $59.00 monthly as insurance. How many slices should the restaurant sell in a month to break even?
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