Your firm has purchased an injection molding machine at a cost of $100,000. The machine's useful life is estimated at 8 years. Your accounting department has estimated the capital cost for this machine at about $25,455 per year. If your firm's minimum acceptable rate of return is 20%, how much salvage value did the accounting department assume at the end of 8 years? Use Capital Recovery method.

Your firm has purchased an injection molding machine at a cost of $100,000. The machine's useful life is estimated at 8 years. Your accounting department has estimated the capital cost for this machine at about $25,455 per year. If your firm's minimum acceptable rate of return is 20%, how much salvage value did the accounting department assume at the end of 8 years? Use Capital Recovery method.

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

Your firm has purchased an injection molding machine at a cost of $100,000. The machine's useful life is estimated at 8 years. Your accounting department has estimated the
capital cost for this machine at about $25,455 per year. If your firm's minimum acceptable rate of return is 20%, how much salvage value did the accounting department assume at
the end of 8 years? Use Capital Recovery method.

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