An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. The treatment will cost $50,000 the first year, but process improvements will allow the costs to decline by 55,000 each year. As an alternative, an outside company will process the wastes for the fixed price of $25,000/year throughout the 12 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 12 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 5%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 5% per year. The AW of the in-house treatment is S (Round to the nearest dollar.) The AW of the outside treatment is S (Round to the nearest dollar) The processing is the most economical alternative outside in-house
An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. The treatment will cost $50,000 the first year, but process improvements will allow the costs to decline by 55,000 each year. As an alternative, an outside company will process the wastes for the fixed price of $25,000/year throughout the 12 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 12 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 5%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 5% per year. The AW of the in-house treatment is S (Round to the nearest dollar.) The AW of the outside treatment is S (Round to the nearest dollar) The processing is the most economical alternative outside in-house
Accounting Information Systems
10th Edition
ISBN:9781337619202
Author:Hall, James A.
Publisher:Hall, James A.
Chapter1: The Information System: An Accountant’s Perspective
Section: Chapter Questions
Problem 2P
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