An engineer is working on the layout of a new research and experimentation facility. Two plant operators will be required. If, however, an additional $150,000 of instrumentation and remote controls were added, the plant could be run by a single operator. The total before-tax cost of each plant operator is projected to be $52,500 per year. The instrumentation and controls will be depreciated using the MACRS 5-year depreciation schedule. (a) Find the rate of return on the project, and the after tax payback period. (b) Based on a MARR of 15%, is this a desirable investment?
An engineer is working on the layout of a new research and experimentation facility. Two plant operators will be required. If, however, an additional $150,000 of instrumentation and remote controls were added, the plant could be run by a single operator. The total before-tax cost of each plant operator is projected to be $52,500 per year. The instrumentation and controls will be depreciated using the MACRS 5-year depreciation schedule. (a) Find the rate of return on the project, and the after tax payback period. (b) Based on a MARR of 15%, is this a desirable investment?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An engineer is working on the layout of a new research and experimentation facility. Two plant operators will be required. If, however, an additional $150,000 of instrumentation and remote controls were added, the plant could be run by a single operator. The total before-tax cost of each plant operator is projected to be $52,500 per year. The instrumentation and controls will be
(a) Find the
(b) Based on a MARR of 15%, is this a desirable investment?
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