Answer:
To calculate the EUAC (Equivalent Uniform Annual Cost) for defender in year 2, we need to calculate the present worth of all costs associated with the defender printing press and then convert it to an equivalent annual cost.
First, let's calculate the present worth of the costs associated with the defender printing press:
PW = -P - A(P/A, i, n) - G(P/G, i, n)
where:
P = initial cost = $100,000
A = annual O&M cost = $16,000
G = salvage value = $40,000 (since the market value at the end of year 2 is $40,000)
i = MARR = 10%
n = number of years = 2
PW = -$100,000 - $16,000(P/A, 10%, 2) - $40,000(P/G, 10%, 2)
PW = -$100,000 - $16,000(1.7355) - $40,000(0.8264)
PW = -$100,000 - $27,848 - $33,056
PW = -$160,904
Next, we need to convert the present worth to an equivalent annual cost:
EUAC = PW(A/P, i, n)
EUAC = -$160,904(A/P, 10%, 2)
EUAC = -$160,904(0.1627)
EUAC = -$26,181
However, we need to add the annual increase in O&M costs of $5,000 starting in year 3 to this EUAC. So, the EUAC for defender in year 2 is:
EUAC = -$26,181 + $5,000
EUAC = -$21,181
Therefore, the answer is not one of the options provided.