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
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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?
Transcribed Image Text:4 B Draw CFD, and Enter the Answer in 'B2' Cell above. ) 0 1 2 3 5 Answer 6 7 8 9 0 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?
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