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You are doing an evaluation of a new pump for your industrial plant. The purchase cost is $80,000, annual operating cost is $12,000, salvage cost
You are doing an evaluation of a new pump for your industrial plant. The purchase cost is $80,000, annual operating cost is $12,000, salvage cost is $10,000, service life is 10 years and interest rate is 6%. Annual savings in using this pump is $25,000. What is the amount of the following variables (all other variables not changing) which would result in this pump NOT having a positive present value? (20 points) a. Initial cost b. annual operating cost C. service life d. interest rate e. annual savings You are doing an evaluation of a new pump for your industrial plant. The purchase cost is $80,000, annual operating cost is $12,000, salvage cost is $10,000, service life is 10 years and interest rate is 6%. Annual savings in using this pump is $25,000. What is the amount of the following variables (all other variables not changing) which would result in this pump NOT having a positive present value? (20 points) a. Initial cost b. annual operating cost C. service life d. interest rate e. annual savings
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