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Replacement Costs

Vvedavyas15y ago
This is a doubt from Q34 page 29 answer 34 page 145 of the BPP revision kit.

Why haven’t they included a purchase in the 6th year, under the Replace Every Three years NPV calcluation ?
John MoffatJohn MoffatTutor15y ago#1
They simply costed over 6 years because 6 will divide by both 2 and by 3.

However, the alternative method they show (equivalent annual cost) is much the better approach for the exam.
Vvedavyas15y ago#2
I didn't really look at the alternative approach, I will check that out and let you know if I come across any problems there . . .
Thank You very much for your time and help.
John MoffatJohn MoffatTutor15y ago#3
You are welcome.
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