Туре Fe Туре Al First cost, $ - 150,000 -280,000 Annual operating cost, $/year Salvage value, $ Life, years -92,000 -74,000 30,000 70,000 2 4

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Liquid Sleeve, Inc. is a company that makes a sealing solution for machine shaft surfaces that have been compromised by abrasion, high pressures,
or inadequate lubrication. The manager is considering adding a metal-based nanoparticle (Type Al or Fe) to its solution to increase the product’s performance at high temperatures. The costs associated with each type are estimated. If the company’sMARRis 20% per year, which nanoparticle type should the company select? Utilize a rate of return analysis.

Туре Fe
Туре Al
First cost, $
- 150,000
-280,000
Annual operating cost,
$/year
Salvage value, $
Life, years
-92,000
-74,000
30,000
70,000
2
4
Transcribed Image Text:Туре Fe Туре Al First cost, $ - 150,000 -280,000 Annual operating cost, $/year Salvage value, $ Life, years -92,000 -74,000 30,000 70,000 2 4
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