Page 1 of 1
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
Posted: Mon Apr 18, 2022 9:14 am
by answerhappygod
- 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 31 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?)