Answer to Question #55161 in Economics for Pauline

Question

There are two choices for replacing a punch press. The basic model has a useful life of 8 years while the deluxe model has a useful life of 12 years. Whats the most appropriate analysis period for this problem?

a. 20 years
b. 96 years
c. 1.5 years
d. 24 years

Answer 1

If there are two choices for replacing a punch press and if the basic model has a useful life of 8 years while the deluxe model has a useful life of 12 years, then the most appropriate analysis period for this problem is 24 years, because we can divide it both by 12 and 8.

So, the right answer is c. 24 years.