How sensitive is the ror to the salvage value

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Reference no: EM13247492

You are evaluating the feasibility of adding an injection molder to fabricate plastic sporks (everybodyÃ¢â‚¬â„¢s favorite harmless utensil) for the US Facility for the Criminally Insane. An injection molder will cost $1,200,000 installed. The annual profit is estimated at $340,000 while the salvage value is estimated to be $300,000 and the project lifetime is 8 years.
a) Determine the RoR.
b) How sensitive is the RoR to the salvage value? ( Hint: calculate RoR with salvage value = 0, and make your conclusion.)

Reference no: EM13247492

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