This document discusses replacement studies and key concepts:
1. A replacement study determines whether to replace an existing asset (defender) or keep it by comparing the annual worth (AW) of the defender to potential replacement assets (challengers).
2. The economic service life is the number of years an asset can be kept until its AW is lowest.
3. A replacement study is performed by calculating the AW of the defender and challengers over their lifetimes or a specified study period to determine the lowest cost option.
4. The replacement value is the market value of the defender that makes its AW equal to a challenger, helping decide whether to replace or retain the defender.