The Johnson Company pays $1,650 a month to a trucker to haul wastepaper and cardboard to the city dump. The material could be recycled if the company were to buy a $50,000 press baler and spend $20,000 a year for one worker to operate the baler. The baler has an estimated useful life of 14 years, with no şalvage value. Strapping material would cost $1600 per year for the estimated 650 bails a year that would be produced. A wastepaper company will pick up the bales at the plant and pay Johnson for them. In order to justify the baler, how much should Johnson charge the wastepaper company for each bale? Use an interest rate of 8% per year.________.
The Johnson Company pays $1,650 a month to a trucker to haul wastepaper and cardboard to the city dump. The material could be recycled if the company were to buy a $50,000 press baler and spend $20,000 a year for one worker to operate the baler. The baler has an estimated useful life of 14 years, with no şalvage value. Strapping material would cost $1600 per year for the estimated 650 bails a year that would be produced. A wastepaper company will pick up the bales at the plant and pay Johnson for them. In order to justify the baler, how much should Johnson charge the wastepaper company for each bale? Use an interest rate of 8% per year.________.
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 10P
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The Johnson Company pays $1,650 a month to a trucker to haul wastepaper and cardboard to the city dump.
The material could be recycled if the company were to buy a $50,000 press baler and spend $20,000 a year for one worker to operate the baler. The baler has an estimated useful life of 14 years, with no şalvage value.
Strapping material would cost $1600 per year for the estimated 650 bails a year that would be produced.
A wastepaper company will pick up the bales at the plant and pay Johnson for them.
In order to justify the baler, how much should Johnson charge the wastepaper company for each bale?
Use an interest rate of 8% per year.________.
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