A company is considering a capital cost of $80000 to acquire new machinery. The expected annual revenue is $45000. After 6 years its salvage value will be $15000. An overhaul costing $10000 will be needed in year 3. The operation and maintenance cost (O&M) will be $5000 per year. Complete the corresponding table and cashflow diagram below. a. Cash flow table Year 0 1 2 3 4 5 6 Capital Cost Annual Revenue b. Cash flow diagram O&M Overhaul Salvage Cost

Computer Networking: A Top-Down Approach (7th Edition)
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ISBN:9780133594140
Author:James Kurose, Keith Ross
Publisher:James Kurose, Keith Ross
Chapter1: Computer Networks And The Internet
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Problem 2:
A company is considering a capital cost of $80000 to acquire new machinery. The expected
annual revenue is $45000. After 6 years its salvage value will be $15000. An overhaul costing
$10000 will be needed in year 3. The operation and maintenance cost (O&M) will be $5000 per
year. Complete the corresponding table and cashflow diagram below.
a. Cash flow table
Year
0
1
2
3
4
5
6
Capital Cost Annual
Revenue
b. Cash flow diagram
O&M
Overhaul
Salvage
Cost
Transcribed Image Text:Problem 2: A company is considering a capital cost of $80000 to acquire new machinery. The expected annual revenue is $45000. After 6 years its salvage value will be $15000. An overhaul costing $10000 will be needed in year 3. The operation and maintenance cost (O&M) will be $5000 per year. Complete the corresponding table and cashflow diagram below. a. Cash flow table Year 0 1 2 3 4 5 6 Capital Cost Annual Revenue b. Cash flow diagram O&M Overhaul Salvage Cost
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