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What is Replacement Analysis in Engineering Economy about?

This document discusses replacement analysis and summarizes key concepts from Chapter 9 of Engineering Economy (Sullivan, 16th). It addresses whether to keep an existing asset, replace it, or abandon it based on physical impairment, altered requirements, or new technology. Replacement analysis considers economic, ownership, physical, and useful life. Only present and future cash flows are relevant to the decision, not sunk costs. The analysis compares the defender (existing asset) to the challenger (replace

Author

Vinayak Nadiger

Language

EN