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REPLACEMENT ANALYSIS In a replacement study, what is meant by “taking the non-owner’s viewpoint”? In conducting...

REPLACEMENT ANALYSIS
In a replacement study, what is meant by “taking the non-owner’s viewpoint”?

In conducting a replacement study wherein the planning horizon is unspecified, list three assumptions
that are inherent in an annual worth analysis of the defender and challenger.


""note: Hand writing clear or print""
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Answer #1

One of the assumption in an annual worth analysis of the defender and challenger are infinite planning when it's impossible to predict an activity. Technology improvement can't be ruled out although technology is not considered. We have to compute the lives of both defender and challenger. Have to find out the marginal analysis to calculate the cost for one more year for the defender to maintain. Have to replace due to wear and tear over time so the finance have to be considered. Technology development and updation have to considered. Results from earlier replacement have to be validated. Also significant changes in services and products variations to be considered

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