The manager of Liquid Sleeve Inc., a company that makes a sealing solution for machine shaft surfaces that have been compromised by abrasion, high pressures, or inadequate lubrication, is considering adding Al or Fe nanoparticles to its solution to increase the product's performance at high temperatures. The costs associated with each are shown below. The company's MARR is 20% per year. Determine which nanoparticle type the company should select using an incremental rate of return analysis. Type Fe First cost, $ -145,000 Annual operating cost, -86,000 $ per year Salvage value, $ 30,000 Life, years 2 The incremental rate of return is Select type (Click to select) ~ %. Type Al -278,000 -74,000 70,000 4
The manager of Liquid Sleeve Inc., a company that makes a sealing solution for machine shaft surfaces that have been compromised by abrasion, high pressures, or inadequate lubrication, is considering adding Al or Fe nanoparticles to its solution to increase the product's performance at high temperatures. The costs associated with each are shown below. The company's MARR is 20% per year. Determine which nanoparticle type the company should select using an incremental rate of return analysis. Type Fe First cost, $ -145,000 Annual operating cost, -86,000 $ per year Salvage value, $ 30,000 Life, years 2 The incremental rate of return is Select type (Click to select) ~ %. Type Al -278,000 -74,000 70,000 4
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 16PB: At Stardust Gems, a faux gem and jewelry company, the setting department is a bottleneck. The...
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