A machine requires a capital investment of $200,000 and operating expenses will be 20% of the revenue
Question:
a. If the product is sold for $20 per unit, what is the E(PW) of profit to the owner/operator of this machine? The life of the machine is 10 years and MARR is 12% per year.
b. Repeat Part (a) when the life of the machine is eight years.
c. Perform one-at-a-time sensitivity analyses for ±20 per cent changes in yearly production and selling price of the product. Use a 10-year life for the machine.
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...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Question Posted: