Switching to powder coating technology will reduce the emission of volatile organic carbons (VOCs) for a firm's production process. The initial cost is $200,000 with annual costs of $50,000 and revenues of $90,000 in the first year. Revenues are projected to increase by $2,000 annually after Year 1. The salvage value 10 years from now is projected to be $30,000. What rate of return will the firm make on this investment?

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Switching to powder coating technology will reduce the
emission of volatile organic carbons (VOCs) for a firm's
production process. The initial cost is $200,000 with
annual costs of $50,000 and revenues of $90,000 in the
first year. Revenues are projected to increase by $2,000
annually after Year 1. The salvage value 10 years from
now is projected to be $30,000. What rate of return
will the firm make on this investment?
Transcribed Image Text:Switching to powder coating technology will reduce the emission of volatile organic carbons (VOCs) for a firm's production process. The initial cost is $200,000 with annual costs of $50,000 and revenues of $90,000 in the first year. Revenues are projected to increase by $2,000 annually after Year 1. The salvage value 10 years from now is projected to be $30,000. What rate of return will the firm make on this investment?
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