Question
Calculate the ARR for a manufacturing company purchasing a new equipment. The details are as follows: $95,000 for equipment with useful life of 8 years
Calculate the ARR for a manufacturing company purchasing a new equipment. The details are as follows:
$95,000 for equipment with useful life of 8 years and no salvage value.
Maintenance costs are expected to be $6,900 per year and increase by 4% in Year 6 and remain at that rate.
Materials in Year 1 are estimated to be $18,000 but remain constant at $15,000 per year for the remaining years.
Labor is estimated to start at $80,000 in Year 1, increasing by 4% each year after.
Revenues are estimated from year 1 - 7 to be: 0; 90,000; 100,000; 125,000; 150,000; 150,000; 150,000;
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