A pump has failed in a facility that will be completely replaced in 3 years. A b

Question

A pump has failed in a facility that will be completely replaced in 3 years. A brass pump costing $6000 installed will last 3 years. However, a used stainless steel pump that should last 3 more years has been sitting in the maintenance shop for a year. The pump cost $13,000 new. The accountants say the pump is worth $7000 now. The maintenance supervisor says that it will cost an extra $500 to reconfigure the pump for the new use and that he could sell it used (as is) for $4000.

How much cheaper or more expensive would it be to use the stainless steel pump rather than a new brass pump?

1) $1500 cheaper

2) $1500 more expensive

3) $7500 cheaper

4) $7500 more expensive

Explanation / Answer

4) $7500 more expensive

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