Question
A company is investigating the high consumption of electrical energy it uses in production and the possibilities to reduce it. He found that if he
A company is investigating the high consumption of electrical energy it uses in production and the possibilities to reduce it. He found that if he put a capacitor and an automatic booster, he could save more energy, $240,000 in the first year and 8% in the following years. The cost of the system he will install is 680,000 dollars. Annual maintenance expense is $35,000. The company's capital cost is 25% and the system has no scrap value. Would you recommend installing this system, which has an economic life of 20 years and has no salvage value?
(YENH Method)
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