Question

A machine cost rs 500. Operation and maintenance cost are zero for the first year and increases by rs 100 every year. If money is worth 5% every year, determine the best age at which the machine should be replaced. The resale value of the machine is negligibly small. What is the weighted average cost of owning and operating the machine?

Answer 1

increases by rs 100 every year. If money is worth 5% every year, determine the best age at which the machine should be replaced. The resale value of the machine is negligibly small. What is the weighted average cost of owning and operating the m