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The best backhoe based on the AEW method is a) Delta; b) Epsilon; c) Zeta; d) None of the backhoes is acceptable.

2 of 5 An electric powerline company is pondering the replacement of an aging backhoes. The key parameters of the three backhoes under scrutiny are provided below. Parameters 1. Initial Cost Epsilon 375,000 Zeta 425,000 2. Revenues Delta 325,000 290,000 at EOY1 increasing by $2,000 annually thereafter 185,000 at 1 increasing by 3% annually thereafter 250,000 at EOY1 decreasing by $2,000 annually thereafter 215,000 at EOY1 increasing by $2,000 annually thereafter 3. Operating costs ($) 155,000 at EOY1 increasing by 2% annually thereafter EOY1-EOY8 = 150,000; EOY9-EOY16 = 175,000 60,000 7.000 4. End-of-life salvage value ($) 5. Useful life (years) 8 16 EOY = End-of-year Industry Standard 4 years MARR = 10% 2 of 5 An electric powerline company is pondering the replacement of an aging backhoes. The key parameters of the three backhoes under scrutiny are provided below. Parameters 1. Initial Cost Epsilon 375,000 Zeta 425,000 2. Revenues Delta 325,000 290,000 at EOY1 increasing by $2,000 annually thereafter 185,000 at 1 increasing by 3% annually thereafter 250,000 at EOY1 decreasing by $2,000 annually thereafter 215,000 at EOY1 increasing by $2,000 annually thereafter 3. Operating costs ($) 155,000 at EOY1 increasing by 2% annually thereafter EOY1-EOY8 = 150,000; EOY9-EOY16 = 175,000 60,000 7.000 4. End-of-life salvage value ($) 5. Useful life (years) 8 16 EOY = End-of-year Industry Standard 4 years MARR = 10%

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