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Your firm is thinking about investing $300,000 in the overhaul of a manufacturing cell in a lean environment. Revenues are expected to be $39,000 in
Your firm is thinking about investing $300,000 in the overhaul of a manufacturing cell in a lean environment. Revenues are expected to be $39,000 in year one and then increasing by $13,000 more each year thereafter. Relevant expenses will be $25,000 in year one and will increase by $12,500 per year until the end of the cell's nine-year life. Salvage recovery at the end of year nine is estimated to be $8,000. What is the annual equivalent worth of the manufacturing cell if the MARR is 10% per year? How sensitive is the annual worth to 20% changes in the MARR? Are changes in the MARR really a significant consideration in this problem? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. MARR,'% Annual Equivalent Worth 10 12 The AW sensitive to changes in the MARR as the decision changed
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