An inline filter has an estimated life of nine years. By adding a purifier to the filter, savings of $400 in annual operating costs can be obtained. Interest on capital is 6%. Compute the maximum expenditure justifiable for the purifier.

An inline filter has an estimated life of nine years. By adding a purifier to the filter, savings of $400 in annual operating costs can be obtained. Interest on capital is 6%. Compute the maximum expenditure justifiable for the purifier.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

An inline filter has an estimated life of nine years. By adding a purifier to the filter, savings of $400 in annual operating costs can be obtained. Interest on capital is 6%. Compute the maximum expenditure justifiable for the purifier.

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