Estimate the benefit to society from the use of the filter

Reference no: EM13207139

Assume that the cost of purchasing an exhaust filter for a certain factory is $6,000 and the filter needs to be replaced every three years. If the estimated benefit to society from the use of the filter is $3,000 for the first year and $1,900 for the next two years and if the market interest rate is 6% should we proceed with purchase of the filter? If the market interest rate is 9% should we proceed with the purchase?

Year 1 2 3
Benefit $3,000 $1,900 $1,900

Reference no: EM13207139

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