4a.
The data below are the estimation for PTI's existing and proposed
generating sets
S/N
1234
1.
2.
3.
4.
5.
FACTOR
Cost
Operating expenses (annual)
Scrap value
Interest Rate
Life of Equipment
From the figures above:
1.
EXISTING
EQUIPMENT
$1,500
$5,000
$500
10%
1year
PROPOSED
EQUIPMENT
$10,000
$4,000
$1,000
10%
9years
Calculate the Average Annual cost for the two equipments
Advice PTI on whether it should continue to maintain and use the
old generating set or replace it with the proposed generator