You want to buy a new machine. It's going to cost $200,000 and have a salvage value of $15,0 after 7 years. Annual operating costs are $75,000. It also costs $5000 a year to employ an operator for the machine. If at year 0 you sell your current machine for $3,000 and purchase new machine, how much will you need to generate in revenue to make a 12% rate of return?

You want to buy a new machine. It's going to cost $200,000 and have a salvage value of $15,0 after 7 years. Annual operating costs are $75,000. It also costs $5000 a year to employ an operator for the machine. If at year 0 you sell your current machine for $3,000 and purchase new machine, how much will you need to generate in revenue to make a 12% rate of return?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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