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You are considering whether to replace an existing flow meter. The existing flow meter can

You are considering whether to replace an existing flow meter. The existing flow meter can be sold now for $50 or it can be sold in one year for $10. It will cost $30 to operate and maintain over the next year(in end of year value). A new meter costs 400$ and has a 10-year life. It can be sold for $40 at the end of its life. The new meter costs $14 per year to operate and maintain. Assume there is no corporate tax and your firm uses a cost of capital of 12% for projects such as this.

Do you recommend replacing the odl meter immediately?

Dec 03 2019 Read more Less More

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