Suppose that you have just completed the mechanical design of a high-speed automated palletizer that has an investment cost of $3,800,000. The existing palletizer is quite old and has no salvage value. The market value for the new palletizer is estimated to be $430,000 after nine years. One million pallets will be handled by the palletizer each year during the nine-year expected project life. What net savings per pallet (i.e., total savings less expenses) will have to be generated by the palletizer to justify this purchase in view of a MARR of 18% per year? Use the AW method. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year. The net savings required to be generated by the new palletizer to justify its purchase are $ per pallet (Round to the nearest cent)
Suppose that you have just completed the mechanical design of a high-speed automated palletizer that has an investment cost of $3,800,000. The existing palletizer is quite old and has no salvage value. The market value for the new palletizer is estimated to be $430,000 after nine years. One million pallets will be handled by the palletizer each year during the nine-year expected project life. What net savings per pallet (i.e., total savings less expenses) will have to be generated by the palletizer to justify this purchase in view of a MARR of 18% per year? Use the AW method. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year. The net savings required to be generated by the new palletizer to justify its purchase are $ per pallet (Round to the nearest cent)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose that you have just completed the mechanical design of a high-speed automated palletizer that has an investment cost of $3,800,000. The existing palletizer is quite
old and has no salvage value. The market value for the new palletizer is estimated to be $430,000 after nine years. One million pallets will be handled by the palletizer each
year during the nine-year expected project life. What net savings per pallet (i.e., total savings less expenses) will have to be generated by the palletizer to justify this purchase
in view of a MARR of 18% per year? Use the AW method.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year.
The net savings required to be generated by the new palletizer to justify its purchase are $
per pallet (Round to the nearest cent)
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