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Enter the value, overhaul and costs of the current equipment and the price and costs of a new one to compare equivalent annual cost, find the economic life and decide whether to keep or replace.
Pre-sizing and estimating tool: results do not replace design, calculations or reports signed by a licensed professional, nor verification against the applicable codes and standards.
The lowest point of each curve is its economic life. Replace when the new unit’s EAC is below the current one’s.
Spending each year keeping the current unit or with the new one, excluding investment.
Net investment in year 0 and cost difference each year, undiscounted and discounted.
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When the new unit’s equivalent annual cost over its economic life is lower than the lowest equivalent annual cost of keeping the current one. Rising maintenance, major overhauls and high energy use speed up replacement.
It is the number of years of use with the lowest equivalent annual cost. It can be much shorter than physical life: the equipment still runs, but keeping it already costs more than replacing it.
Because by keeping the equipment the company gives up selling it today. That value is the opportunity cost of keeping it.
Important notice: Indus Metrics tools produce estimates and pre-sizing results from the data you enter and from published engineering methods. They do not replace design, calculations or reports signed by a licensed professional engineer (PE), nor verification against the applicable codes, standards and regulations, such as OSHA rules and the ASME codes. Material and fuel properties vary: check manufacturer data or your own process analyses before deciding. By using this site you agree to the Terms of Use.
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