A certain heat exchanger costs 30,000 installed and has an estimated life of 6 years. By the addition of certain auxiliary equipment when the heat exchanger was initially purchased, annual savings of 1,000 in operating cost can be obtained and the estimated life of the heat exchanger can be doubled. Neglecting any salvage value for either plan, and with effective annual interest at 8%, what present expenditure can be justified for the auxiliary equipment?
A certain heat exchanger costs 30,000 installed and has an estimated life of 6 years. By the addition of certain auxiliary equipment when the heat exchanger was initially purchased, annual savings of 1,000 in operating cost can be obtained and the estimated life of the heat exchanger can be doubled. Neglecting any salvage value for either plan, and with effective annual interest at 8%, what present expenditure can be justified for the auxiliary equipment?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A certain heat exchanger costs 30,000 installed and has an estimated life of 6 years. By the addition of certain auxiliary equipment when the heat exchanger was initially purchased, annual savings of 1,000 in operating cost can be obtained and the estimated life of the heat exchanger can be doubled. Neglecting any salvage value for either plan, and with effective annual interest at 8%, what present expenditure can be justified for the auxiliary equipment? *
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