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1) 2) A company is planning to invest $3 million for a new equipment. The service life is estimated to be 10 years and the
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A company is planning to invest $3 million for a new equipment. The service life is estimated to be 10 years and the salvage value at the end of year 10 of $200,000. The annual operating and maintenance cost will be $500,000. The estimated revenues: $1 million per year for the first 5 years, and $2 million per year for years 6 to year 10. If the company's MARR is 18%, 1. Determine the annual equivalent costs, AEC (capital recovery costs + O&M costs). 2. Determine the annual equivalent revenues. 3. Is this project acceptable? Ram purchased a Machinery costing $11000 with a useful life of 10 years and a residual value of $1000.The rate of depreciation d is 20%. What is the D6 and B8? Use the declining balance methodStep by Step Solution
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