Required rate of return is 25% a year. You are planning to invest $3,000 in new equipment. The investment will generate cost savings of $2,000 a year for two years after that the salvage value is zero. Compute the payback period. O 0.667 years O 4 years O 2.5 years O 1.5 years O not enough information

Required rate of return is 25% a year. You are planning to invest $3,000 in new equipment. The investment will generate cost savings of $2,000 a year for two years after that the salvage value is zero. Compute the payback period. O 0.667 years O 4 years O 2.5 years O 1.5 years O not enough information

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Time left 1:14:17 What is the Future worth of the following cashflows: First Cost = 52,000$, AOC = 4,000$, Salvage value = 12,000$, n = 13 and i= 14%. O a. -73,185$ O b. -12,527$ O c. 49,606$ O d. -401,960$ Recovery period is the remaining interval of time in the life of the asset in years. Select one: a. True O b. False
Your company is determing whether or not it should invest in a new pallet wrapping station. The station would cost $6,500 and your company's MARR is 13%. You estimate the purchasing a pallet wrapper would save you $2,000 in labor annually, and at the end of 3 years you would realize a salvage value of $400. How would you calculate the present worth of this investment in Excel?
B2
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