Discussion
A defender's equivalent annual cost over its economic life is 22 000 and the challenger's is 22 200. The defender should be
Answer: A
Correct answer: kept, though the margin is within estimating error
On the figures the defender is marginally cheaper, so it is kept - but 200 in 22,000 is under one per cent, far inside the accuracy of any forecast of future maintenance or salvage. The honest report says the two are effectively equal and lets non-economic factors, such as reliability or capacity, settle it.
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