After 15 years of employment in the airline industry, John started his own consulting company to use physical and computer simulation in the analysis of commercial airport accidents on runways. He estimates his average cost of new capital at 8% per year for physical simulation projects, that is, where he physically reconstructs the accident using scale versions of planes, buildings, vehicles, etc. He has established 12% per year as his MARR. What net rate of return on capital investments for physical simulation does he expect?
After 15 years of employment in the airline industry, John started his own consulting company to use physical and computer simulation in the analysis of commercial airport accidents on runways. He estimates his average cost of new capital at 8% per year for physical simulation projects, that is, where he physically reconstructs the accident using scale versions of planes, buildings, vehicles, etc. He has established 12% per year as his MARR. What net rate of return on capital investments for physical simulation does he expect?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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After 15 years of employment in the airline industry,
John started his own consulting company to
use physical and computer simulation in the analysis
of commercial airport accidents on runways.
He estimates his average cost of new capital at
8% per year for physical simulation projects, that
is, where he physically reconstructs the accident
using scale versions of planes, buildings, vehicles,
etc. He has established 12% per year as his MARR.
What net rate of
physical simulation does he expect?
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