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Replacement Cost Formula

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Replacement costs refer to the estimated expenses or expenditures required to replace an existing asset or item with a new one of similar functionality, condition, and capacity. Check FAQs
CR=V-Vs
CR - Replacement Cost?V - Original Cost of Equipment?Vs - Salvage Value of Equipment?

Replacement Cost Example

With values
With units
Only example

Here is how the Replacement Cost equation looks like with Values.

Here is how the Replacement Cost equation looks like with Units.

Here is how the Replacement Cost equation looks like.

42555Edit=50000Edit-7445Edit
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HomeIcon Home » Category Engineering » Category Chemical Engineering » Category Plant Design and Economics » fx Replacement Cost

Replacement Cost Solution

Follow our step by step solution on how to calculate Replacement Cost?

FIRST Step Consider the formula
CR=V-Vs
Next Step Substitute values of Variables
∴ CR=50000-7445
Next Step Prepare to Evaluate
∴ CR=50000-7445
LAST Step Evaluate
∴CR=42555

Replacement Cost Formula Elements

Variables
Replacement Cost
Replacement costs refer to the estimated expenses or expenditures required to replace an existing asset or item with a new one of similar functionality, condition, and capacity.
Symbol: CR
Measurement: NAUnit: Unitless
Note: Value can be positive or negative.
Formulas to find Replacement CostOpen Variable
Original Cost of Equipment
Original Cost of Equipment refers to the total amount of money spent to acquire or purchase a specific piece of equipment when it was initially obtained for use in a business or operational setting.
Symbol: V
Measurement: NAUnit: Unitless
Note: Value should be greater than 0.
Formulas to find Original Cost of EquipmentOpen Variable
Salvage Value of Equipment
Salvage Value of Equipment refers to the estimated residual or scrap value that an asset is expected to have at the end of its useful life or a specific period.
Symbol: Vs
Measurement: NAUnit: Unitless
Note: Value can be positive or negative.
Formulas to find Salvage Value of EquipmentOpen Variable

Other formulas in Interest and Investment Costs category

​Go Capitalized Cost
K=V+(CR(1+i)n-1)
​Go Future Worth of Annuity
F=A⋅((1+i)n-1i)
​Go Future Worth of Annuity given Present Annuity
F=P⋅((1+i)n)
​Go Future Worth of Perpetuity
FP=A⋅((1+i)n-1(i))

How to Evaluate Replacement Cost?

Replacement Cost evaluator uses Replacement Cost = Original Cost of Equipment-Salvage Value of Equipment to evaluate the Replacement Cost, Replacement cost refers to the estimated amount of money required to replace or restore an asset to its original condition or functionality. Replacement Cost is denoted by CR symbol.

How to evaluate Replacement Cost using this online evaluator? To use this online evaluator for Replacement Cost, enter Original Cost of Equipment (V) & Salvage Value of Equipment (Vs) and hit the calculate button.

FAQs on Replacement Cost

What is the formula to find Replacement Cost?
The formula of Replacement Cost is expressed as Replacement Cost = Original Cost of Equipment-Salvage Value of Equipment. Here is an example- -24452 = 50000-7445.
How to calculate Replacement Cost?
With Original Cost of Equipment (V) & Salvage Value of Equipment (Vs) we can find Replacement Cost using the formula - Replacement Cost = Original Cost of Equipment-Salvage Value of Equipment.
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