Your firm is currently paying $3,000 a year to a commercial garbage collection agency to haul waste paper to the city dump. The paper could be sold as waste paper if it were baled and strapped. A paper baler is available at the following conditions:                        Purchase price = $6,500                      Labor to operate baler = $3,500/year                      Strapping material = $300/year                      Life of baler = 30 years                      Salvage value = $500                      MARR = 10%/year   If it is estimated that 500 bales would be produced per year, what would the selling price per bale to a wastepaper dealer have to be to make this project acceptable? Assume no inflation.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Your firm is currently paying $3,000 a year to a commercial garbage collection agency to haul waste paper to the city dump. The paper could be sold as waste paper if it were baled and strapped. A paper baler is available at the following conditions:

 

                     Purchase price = $6,500

                     Labor to operate baler = $3,500/year

                     Strapping material = $300/year

                     Life of baler = 30 years

                     Salvage value = $500

                     MARR = 10%/year

 

If it is estimated that 500 bales would be produced per year, what would the selling price per bale to a wastepaper dealer have to be to make this project acceptable? Assume no inflation.

 

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