Homework Answers
| A | B | C | D | E | F | G |
| 2 | Economic service life is the year when the annual worth is maximum. | |||||
| 3 | Years Retained | Capital Recovery ($/Yr) | AW of Operating Cost ($/yr) | Total AW ($/Yr) | ||
| 4 | 1 | -18000 | -1500 | -19500 | =D4+E4 | |
| 5 | 2 | -16000 | -2000 | -18000 | ||
| 6 | 3 | -13200 | -2650 | -15850 | ||
| 7 | 4 | -12500 | -3500 | -16000 | ||
| 8 | 5 | -11800 | -4500 | -16300 | ||
| 9 | ||||||
| 10 | Since the total annual worth is maximum in year 3 i.e. least negative. | |||||
| 11 | ||||||
| 12 | Thus the ESL is 3 Years. | |||||
| 13 | ||||||
| 14 | Hence the first option is correct. | |||||
| 15 | ||||||
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