Amazon site BF13 wants to test a new label scanner on their package sorter. The initial investmer of the machine will be $2.5 million and the benefit due to cost savings will be $900,000 per year. Normal maintenance on the machine will cost $75,000 per year and they plan for major maintenance in year 7 of $500,000. At the end of the 10 year project life, they are able to sell the parts to another warehouse for $600,000. If the MARR is 11% what is the AEW of this project?
Amazon site BF13 wants to test a new label scanner on their package sorter. The initial investmer of the machine will be $2.5 million and the benefit due to cost savings will be $900,000 per year. Normal maintenance on the machine will cost $75,000 per year and they plan for major maintenance in year 7 of $500,000. At the end of the 10 year project life, they are able to sell the parts to another warehouse for $600,000. If the MARR is 11% what is the AEW of this project?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 5EB: A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment...
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