ECONOMIC SERVICE LIFE

 
Engineering Economy 7th Edition
Chapter 11
please use the chapter powerpoint and book as reference which i attached.
attached : the case, references, sample solution
The solution should be 2 things,

1-excel sheet showing the answer using economy formula
2-word answering the following question.
1. Find the ESL (Economic Service Life) of the CNC Machine. How does the ESL compare with the maximum allowed Retrofits or repairs?

2. The production manager and safety expert said, contend that only one retrofit (repair) is practical, because these types of CNCs usually have their ESL at their minimum before the second retrofit. Determine a market value for this CNC that will force the ESL to be 8 years. Comment on the practicality of ESL 8 years, given the MV (Market Value) calculated.

3. The Project Director advised you not to plan for any retrofits after the first retrofit. This is because the CNC will be replaced after 14,000 hours of operation. The cost Engineer needs to establish the base AOC (Annual Operating Cost) from year 1 sot that the ESL is 6 years. He also told you to assume now that the 15% growth rate applies from year 1 forward. How does this AOC value compare with the retrofit cost after the first retrofit?

4. What do you think of these suggestions from the plant superintendent and the line manager?
SUBMISSION REQUIRMENTS
1. Carry out the analysis and present the results in ONE WORD OR PDF file
2. Analysis should show the EXCEL analysis sheets
3. Submit the original Excel sheet you used in the analyses and organize the work in proper TABS as per the case questions above. All equations used or programming made inside excel should be available for the instructor’s review
4. The report will be organized as follows:
a) Cover page (names, IDs, Course, Semester, Professor’s Name)
b) Copy of the whole case and questions
c) Summary of the most important findings from the analysis
d) Detailed results AND analysis of the case with snapshots from the Excel sheets. Each picture, or table, or figure should be numbered and discussed in the text in detail
e) Appendix (any additional results you wish to add)
f) Format for the report
a) Font ARIAL size 10pts, spacing 1.5, margins 1.5” all sides
b) Number each page except cover page
c) Divide the work into the sections above and each section should be in bold and font size 14pts

WE ACCEPT