For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. A metal plating company is considering four different methods for recovering by-product heavy metals from a manufacturing site’s liquid waste. The investment costs and annual net incomes associated with each method have been estimated. All methods have an 8-year life and the MARR is 10%. Use the ERR method (and an external reinvestment rate of 12%) to determine which method should be selected. A B C D First Cost, $ 36,000 30,000 55,000 40,000 Annual Cash Flow, $/year + 5,000 + 4,000 + 10,500 + 8,000 Salvage Value, $ 2,000 1,000 0 500
For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box.
A metal plating company is considering four different methods for recovering by-product heavy metals from a manufacturing site’s liquid waste. The investment costs and annual net incomes associated with each method have been estimated. All methods have an 8-year life and the MARR is 10%. Use the ERR method (and an external reinvestment rate of 12%) to determine which method should be selected.
|
A |
B |
C |
D |
|
|
First Cost, $ |
36,000 |
30,000 |
55,000 |
40,000 |
|
Annual Cash Flow, $/year |
+ 5,000 |
+ 4,000 |
+ 10,500 |
+ 8,000 |
|
Salvage Value, $ |
2,000 |
1,000 |
0 |
500 |
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