Question
Barron Chemical uses a thermoplastic polymer to enhance the appearance of certain RV panels. The initial cost of one process was $130,000 with annual costs
Barron Chemical uses a thermoplastic polymer to enhance the appearance of certain RV panels. The initial cost of one process was $130,000 with annual costs of $49,000 and revenues of $78,000 in year 1, increasing by $1000 per year. A salvage value of $23,000 was realized when the process was discontinued after 8 years. What rate of return did the company make on the process?
Answer should be solved using compound interest tables and the correct answer is 18.5%. But can you please explain exactly how to go about finding the answer using the compound interest tables step by step. Thank you and try to be as thorough as possible in your explanation, will rate immediately.
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