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Project Nature: Installing a cooling-fan at Alcoa Aluminum's McCook plant to reduce the work-in- process inventory buildup Given: Financial facts o Required investment: $536,000 o
Project Nature: Installing a cooling-fan at Alcoa Aluminum's McCook plant to reduce the work-in- process inventory buildup Given: Financial facts o Required investment: $536,000 o Service life: 16 years o Salvage value: 0 o Reduction of WIP (working-capital release): $2,121,000 o Depreciation Method: 7-year MACRS o Annual electricity cost: $86,000 o Income tax rate:40% O MARR: 20% Find: Develop the project cash flow
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