11-15. An industrial machine costing $14,000 will produce net cash savings of $5,000 per year. The machine

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11-15. An industrial machine costing $14,000 will produce net cash savings of $5,000 per year. The machine has a five-year useful life but must be returned to the factory for major repairs after three years of operation. These repairs cost $5,000. The company’s MARR is 10% per year. What IRR will be earned on the purchase of this machine? Analyze the sensitivity of IRR to ± $2,000 changes in the repair cost. (11.3)

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Engineering Economy

ISBN: 9780134870069

17th Edition

Authors: William Sullivan, Elin Wicks, C Koelling

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