majestic aircraft carrier is a manufacturer of single engine high performance turboprop aircraft. MAC is considering purchasing composite wing fixtures for the assembly of its signature aircraft. The cost of the assembly system is $3 million with life expectancy of 10 years, annual operating cost of $200000 with zero salvage value. MAC anticipates a stream of $1000000 in revenue per year for 10 years from this project. Assuming MAC uses a MARR of 10 percent, and e=14% is this investment economically justified ? calculate the ERR.( show rates for reinvestment and loan in calculations)
majestic aircraft carrier is a manufacturer of single engine high performance turboprop aircraft. MAC is considering purchasing composite wing fixtures for the assembly of its signature aircraft. The cost of the assembly system is $3 million with life expectancy of 10 years, annual operating cost of $200000 with zero salvage value. MAC anticipates a stream of $1000000 in revenue per year for 10 years from this project. Assuming MAC uses a MARR of 10 percent, and e=14% is this investment economically justified ? calculate the ERR.( show rates for reinvestment and loan in calculations)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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majestic aircraft carrier is a manufacturer of single engine high performance turboprop aircraft. MAC is considering purchasing composite wing fixtures for the assembly of its signature aircraft. The cost of the assembly system is $3 million with life expectancy of 10 years, annual operating cost of $200000 with zero salvage value. MAC anticipates a stream of $1000000 in revenue per year for 10 years from this project. Assuming MAC uses a MARR of 10 percent, and e=14% is this investment economically justified ? calculate the ERR.( show rates for reinvestment and loan in calculations)
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