ABSTRACT
The economic life of the machinery’s is conceptually defined as the period after which the machinery should be replaced, which in turn is influenced by operating and maintenance costs on the one hand and capital cost on the other hand. These costs are converted into the uniform annual equivalent (UAE). The UAE is a function of the present value of costs, the life of the machinery’s and the discount rate. The UAE is simply. PVCost/PVIFAk,n
The economic life is the period when UAE of total cost during the period is minimum. Hence a decision has to be taken to select the most appropriate equipment, the economic life of which has been calculated & verified, from the various equipment available in the market. To illustrate the technique typical Lignite Mines in western India has been used as a backdrop.
