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how do you solve this using a ti-84 plus Example 4: Danbury Investment Co. is considering a replacement project (new machine) which will reduce costs.
how do you solve this using a ti-84 plus Example 4: Danbury Investment Co. is considering a replacement project (new machine) which will reduce costs. The expansion will cost approximately $96,500 to implement. Costs savings are expected to be $15,000 per year for the first 4 years, then $11,000 per year for another 3 years and then trail off to $8,000, $6,500, and $3,300 in the final three years. After that, they expect to have to make additional improvements. What is the profitability index of this project? Are the cost savings worth the investment? Assume the cost of capital is 15%
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