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Your company is proposing the purchase of a treatment plant to convert waste material as compost used in the agriculture division. The treatment plant can
Your company is proposing the purchase of a treatment plant to convert waste material as compost used in the agriculture division. The treatment plant can be purchased for $17 million and is operational for 5 years. The treatment plant will save the agriculture division $3.5 million yearly from compost purchase that it would otherwise have to purchase. After 5 years, the plant can be sold back to a factory restoration consortium for $5 million. The company's MARR is 9%. a) Evaluate if this proposal should be accepted by calculating PW. (1 mark) b) Evaluate if this proposal should be accepted by calculating FW. (1 mark) c) Evaluate if this proposal should be accepted by calculating AW. (1 mark)
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