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An expenditure of $25,000 is made to modify a material-handling system in a small job shop. This modification will result in first-year savings of $2,500,
An expenditure of $25,000 is made to modify a material-handling system in a small job shop. This modification will result in first-year savings of $2,500, a second-year savings of $4,200, and a savings of $5,500 per year thereafter. How many years must the system last if an 15% return on investment is required? The system is tailor made for this job shop and has no market (salvage) value at any time.
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