You are given the following financial data about a new system to be implemented at a company: Investment cost at n = 0: $20,000. Investment cost at n = 1: $10,000. Useful life: 10 years. Salvage value (at the end of 11 years): $6,000. Annual revenues: $15,000 per year. Annual expenses: $5,000 per year. MARR: 10%. Note that the first revenues and expenses will occur at the end of year 2. (a) Determine the conventional-payback period. (1)

You are given the following financial data about a new system to be implemented at a company: Investment cost at n = 0: $20,000. Investment cost at n = 1: $10,000. Useful life: 10 years. Salvage value (at the end of 11 years): $6,000. Annual revenues: $15,000 per year. Annual expenses: $5,000 per year. MARR: 10%. Note that the first revenues and expenses will occur at the end of year 2. (a) Determine the conventional-payback period. (1)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

In excel

You are given the following financial data about a new system to be implemented at
a company:
Investment cost at n = 0: $20,000.
Investment cost at n = 1: $10,000.
Useful life: 10 years.
Salvage value (at the end of 11 years): $6,000.
Annual revenues: $15,000 per year.
Annual expenses: $5,000 per year.
MARR: 10%.
Note that the first revenues and expenses will occur at the end of year 2.
(a) Determine the conventional-payback period.
(b) Determine the discounted-payback period.

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