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Please show working Lester Peabody decides to install a fuel storage system for his farm that will save him an estimated $6.50/gallon on his fuel
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Lester Peabody decides to install a fuel storage system for his farm that will save him an estimated $6.50/gallon on his fuel cost. He uses an estimated 20,000 gallons/year on his farm. Initial cost of the system is $750,000 and the annual maintenance is a uniform amount of $25,000. After a period of 10 years the estimated salvage is $30,000. If money is worth 12%, is it a wise investment?
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