Example: A new process for a manufacturing process will have a first cost of $55,000 with annual costs of $38,000. Extra income associated with the new process is expected to be $62,000 per year. What is the payback period at i= 12% per year? a) 2.29 b) 3.00 c) 6.00 d) 2.14

Example: A new process for a manufacturing process will have a first cost of $55,000 with annual costs of $38,000. Extra income associated with the new process is expected to be $62,000 per year. What is the payback period at i= 12% per year? a) 2.29 b) 3.00 c) 6.00 d) 2.14

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

Example: A new process for a manufacturing process will have a first cost of $55,000 with
annual costs of $38,000. Extra income associated with the new process is expected to be $62,000
per year. What is the payback period at i= 12% per year?
a) 2.29
b) 3.00
c) 6.00
d) 2.14
CITI

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Ñ5
ANSWER: ERR (i %) = 23.71%