Question
A medium-sized nonprofit company in a remote desert incurs a cost of $170 a month to bring bottle water to quench the thirst of its
A medium-sized nonprofit company in a remote desert incurs a cost of $170 a month to bring bottle water to quench the thirst of its volunteers.Someone suggested that they could collect rainwater from their roof if they bought a cistern, roof liner, and sterilizer for a total of $4,900.The sterilizer needs maintenance which would cost$1,580a yearin parts and chemicals. Thesterilizer has alife of25yearsand cannot be resold.The sterilized water will be put into plastic bottles whichwould cost $100per year for theestimated450cases of bottlesa yearneeded.A local recyclingcompany will pick upthe used plastic bottlesandgive the nonprofit company$0.10percasefor them.You must use annual cash flow analysis and assume an interest rate of 6%.
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