investment is ($ 350,000) with a (6) year life cycle. The operational o 0) and increased by ($ 2,500) thereafter. A major maintenance should b a cost of ($ 25,000). The salvage value for this units is ($ 35,000). Taki to 18 %, What is the minimum annual revenue that make project profi
investment is ($ 350,000) with a (6) year life cycle. The operational o 0) and increased by ($ 2,500) thereafter. A major maintenance should b a cost of ($ 25,000). The salvage value for this units is ($ 35,000). Taki to 18 %, What is the minimum annual revenue that make project profi
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
![As an energy engineer at an industrial facility. A cogeneration units project is suggested with an
initial investment is ($ 350,000) with a (6) year life cycle. The operational cost at first year is ($
10,000) and increased by ($ 2,500) thereafter. A major maintenance should be made at third year
with a cost of ($ 25,000). The salvage value for this units is ($ 35,000). Taking an interest rate is
equal to 18 %, What is the minimum annual revenue that make project profitable?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb2c9949a-ddf4-4d90-827d-d901901efdb6%2Ff620691a-9c1f-4368-8cb6-f7a7c5ddd535%2F6blg1op_processed.jpeg&w=3840&q=75)
Transcribed Image Text:As an energy engineer at an industrial facility. A cogeneration units project is suggested with an
initial investment is ($ 350,000) with a (6) year life cycle. The operational cost at first year is ($
10,000) and increased by ($ 2,500) thereafter. A major maintenance should be made at third year
with a cost of ($ 25,000). The salvage value for this units is ($ 35,000). Taking an interest rate is
equal to 18 %, What is the minimum annual revenue that make project profitable?
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