economics

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i have some questions please help

Transportation equipment that was purchased in 2004 for $200,000 must be replaced at the end of 2009. what is the estimated cost of the replacement, based on, the following equipment cost index:

Year INDEX YEAR INDEX
2004 223 2007 257
2005 238 2008 279
2006 247 2007 293



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Another question

A set of six long-life light bulbs costs $15.95. Each bulb is rated for 20,000 hours of service and 60 watts of output. The electrical efficiency of each bulb is 85%. The alternative to these long-life bulbs is a standard 60 watt bulb that costs 60 cents ($0.60), is rated for 1000 hours of service and is 95% efficient.

a) If the cost of electricity is 10 cent ($0.10) per kilowatt-hour, which type of bulb is better when lighting is per year. Assume end-of-year cash-flow convention.

b) what factors besides cost may dictate the choice of the better light bulb ??



thanks in advance

  • economics -

    just help me

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