Sulzer Metco Corp purchased a new coating machine to improve performance of its power supply panels. The initial cost was $240,000 with annual operation cost of $80,000. Observed revenues were $95,000 in year 1, increasing by 1.5% each year. A salvage value of $20,000 was realized when the process was discontinued after 10 years. What rate of return did the company make on the process?
Sulzer Metco Corp purchased a new coating machine to improve performance of its power supply panels. The initial cost was $240,000 with annual operation cost of $80,000. Observed revenues were $95,000 in year 1, increasing by 1.5% each year. A salvage value of $20,000 was realized when the process was discontinued after 10 years. What rate of return did the company make on the process?
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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