a. Determine the annual cost savings from using blended pulp.

b. Prepare a capital investment analysis using net present value to determine if the reclamation system is justified. Assume a 10-year life and 8% minimum rate of return. (Use the present value tables in Appendix A.) Round present value calculations to the nearest dollar.

he Victor Paper Company manufactures paper products from pulp. The process creates paper scrap from paper trim, off-grade, and machine errons. resently, the scrap paper is discarded in a landfill. Management is considering a proposal for a scrap papen reclamation system. The system is designed so nat paper is discarded in vacuum collection points located throughout the plant. The vacuum system would be attached to a reclaim process that would dige he scrap paper, turning it back into pulp, and then blending the reclaimed product back into the papermaking process with virgin (new) pulp. The blended stream is termed "blended pulp." It has been determined that the quality af the final product is not adversely impacted by using blended pulp versus tising 100% virgin pulp. In addition, the cost of the reclaimed pulp is considered free" to the blended stream, and causes the amount of virgin pulp useid in the blended stream to be less than would be otherwise. These factors reduce the cost of the blended stream. Some information involving this proposal is as lollows: a. Determine the annual cost savings from using blended palp. tate of ceturn. (Wee the present value tables in Appendix Ai ) Round present value calculations to the netarest dollat