A new production system for a factory is to be purchased and installed for $175,812. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per kWh, and factory MARR is 15% per year, and the salvage value of the system will be $8,172 at year 6. Using the AW method to analyzes if this investment is economically justified A-calculate the AW of the above investment and insert the result below. Selected Answer: $15,522.49 Correct Answer: -15,520.23 ±1%

A new production system for a factory is to be purchased and installed for $175,812. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per kWh, and factory MARR is 15% per year, and the salvage value of the system will be $8,172 at year 6. Using the AW method to analyzes if this investment is economically justified A-calculate the AW of the above investment and insert the result below. Selected Answer: $15,522.49 Correct Answer: -15,520.23 ±1%

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 4CE: Manzer Enterprises is considering two independent investments: A new automated materials handling...

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