Covington Corporation purchased a vibratory finishing machine for $20,000 in year 0. The useful life of the machine is 10 years, at the end of which the machine is estimated to have a salvage value of zero. The machine generates net annual revenues of $6,000. The annual operating and maintenance expenses are estimated to be $800. If Covington's MARR is 16%, how many years will it take before this machine becomes profitable? Assume that the cash flows occur continuously throughout the year. It will take years before this machine becomes profitable. (Round to one decimal place.

Covington Corporation purchased a vibratory finishing machine for $20,000 in year 0. The useful life of the machine is 10 years, at the end of which the machine is estimated to have a salvage value of zero. The machine generates net annual revenues of $6,000. The annual operating and maintenance expenses are estimated to be $800. If Covington's MARR is 16%, how many years will it take before this machine becomes profitable? Assume that the cash flows occur continuously throughout the year. It will take years before this machine becomes profitable. (Round to one decimal place.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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