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You have been asked to evaluate 2 pollution control devices. The wet scrub costs $10000 to set up and $2000 per year to operate. It
You have been asked to evaluate 2 pollution control devices. The wet scrub costs $10000 to set up and $2000 per year to operate. It must be completely replaced every 3 years, and it has no salvage value. The dry scrub device costs $2000 to set up and $1300 per year to operate. It lasts for 5 years and has no salvage value. Assuming that pollution control equipment is replaced as it wears out, which method do you recommend if the cost of capital is 8 percent?
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