Problem 1: (Exercise 6.4 is modified). A company would like to purchase a machine for $375,000 with a life of 6 years. T

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Problem 1 Exercise 6 4 Is Modified A Company Would Like To Purchase A Machine For 375 000 With A Life Of 6 Years T 1 (152.15 KiB) Viewed 29 times

Problem 1: (Exercise 6.4 is modified). A company would like to purchase a machine for $375,000 with a life of 6 years. They estimate the salvage value to be 15% of the initial machine cost. Other operating costs are estimated to be $20,500 per year. The interest rate the company uses to justify their investments, namely the MARR is 25% per year compounded yearly • (25pts) What is the capital recovery cost, CR? • (20pts) What is the minimum amount of annual revenue ($ per year?) that makes this investment an attractive option for the company? (i.e. what is Equivalent UNIFORM (Annual) Cost, EU(A)C?)