Question
You are faced with making a decision on a large capital investment proposal. The capital investment amount is $650,000. Estimated annual revenue at the end
You are faced with making a decision on a large capital investment proposal. The capital investment amount is $650,000. Estimated annual revenue at the end of each year in the eight-year study period is $170,000. The estimated annual year-end expenses are $45,000 starting in year one. These expenses begin decreasing by $4,500 per year at the end of year four and continue decreasing through the end of year eight. Assuming a $15,000 market value at the end of year eight and a MARR = 15% per year, what is your conclusion about the acceptability of this proposal?
a. Not acceptable
b. Acceptable
c. Need more information
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