Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 52

A partner in a medium-size A/E (architectural/engineering) design firm is evaluating two alternatives for improving the exterior appearance of the building they occupy. The building can be completely painted at a cost of $6500. The paint is expected to remain attractive for 4 years, at which time repainting will be necessary. Every time the building is repainted, the cost will be 20% higher than the previous time. Alternatively, the building can be sandblasted now and every 6 years at a cost 40% greater than the previous time. If the company's MARR is 10% per year, what is the maximum amount that could be spent now on the sandblasting alternative that would render the two alternatives indifferent over a study period of 12 years