A lathe costs $10,000 and will incur $200 per year in fixed costs and $25 per hour

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A lathe costs $10,000 and will incur $200 per year in fixed costs and $25 per hour in variable costs. The lathe will be operational for 1,200 hours per year for 5 years and then sold for $2,000. The MARR is 15% per year.
a. Determine the capital recovery cost of the lathe.
b. What is the EUAC of the lathe?
MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...
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Engineering Economy

ISBN: 978-0132554909

15th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

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