A new recycling sorting and processing line is proposed to serve a medium size city. The installed cost of the new line is $2,400,000. The residual value after ten years is estimated at $480,000. The unit would produce recycled material ready for resale at a rate of $0.15/pound, and would run for ten years. How much recyclable material must be generated every year to justify the project (i.e., for the present value of the project to be positive). Use an interest rate of 9%.

A new recycling sorting and processing line is proposed to serve a medium size city. The installed cost of the new line is $2,400,000. The residual value after ten years is estimated at $480,000. The unit would produce recycled material ready for resale at a rate of $0.15/pound, and would run for ten years. How much recyclable material must be generated every year to justify the project (i.e., for the present value of the project to be positive). Use an interest rate of 9%.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

5-S2 A new recycling sorting and processing line is proposed to serve a medium size city. The
installed cost of the new line is $2,400,000. The residual value after ten years is estimated at
$480,000. The unit would produce recycled material ready for resale at a rate of $0.15/pound,
and would run for ten years. How much recyclable material must be generated every year to
justify the project (i.e., for the present value of the project to be positive). Use an interest rate
of 9%.

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