After reading this article you will learn about:- 1. Introduction to Replacement of Equipments 2. Reasons for Replacement of Equipments 3. Factors to be Considered. Introduction to Replacement of Equipments: In replacement, one is concerned with equipment and machinery that deteriorates with the passage of time. Since over time, an equipment ages, every piece of equipment in an industry is [...]
Several common methods used for evaluating proposals for capital expenditures and for comparing and selecting alternative machines or equipment involving capital assets are discussed:- 1. Total life average method, 2. Annual cost method, 3. Present worth method, 4. Rate of return method, 5. MAPI method, and 6. Approximate MAPI solution. 1. Total Life Average Method: Steps Involved: (i) Add the [...]
Following are some of the important methods which are used for equipment replacement studies: 1. Pay-Back Period Method 2. Total Life Average Method 3. Annual Cost Method 4. Present Worth Method 5. Rate of Return Method 6. M.A.P.I. Method. 1. Pay-Back Period Method: This method of equipment replacement studies determines as to how long it will take (in years) to [...]