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U.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened, duplex, and martensitic stainless steel round bars that is expected to cost $13
U.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened, duplex, and martensitic stainless steel round bars that is expected to cost $13 million now and another $10 million 1 year from now. If total operating costs will be $1.3 million per year starting 1 year from now, and the estimated salvage value of the plant is virtually zero, how much must the company make annually in years 1 through 10 to recover its investment plus a return of 18% per year? The company must make $ million annually in years 1 through 10 to recover its investment plus a return of 18% per year. Airodyne Wind, Inc., has wind tunnels that can operate vertically or horizontally for evaluating the effects of air flow on a component's PCB response and reliability. The company expects to build a new tunnel that will be outfitted with multiple sensor ports. For the estimates below, calculate the equivalent annual cost of the project. First Cost Replacement Cost, Year 2 AOC per Year Salvage Value Life, Years Interest Rate $-370,000 $-360,000 $-880,000 $265,000 4 10% The equivalent annual cost of the project is $
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