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How will you calculate the minimum additional profit

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Question - Equivalent annuity method - Owing to the increased concern about the environment, a steel manufacturing company, Y limited, has been asked by regulators to install an equipment to ensure environment-friendly discharge of waste. This equipment will require an initial investment of 50 crores. Now, the company wants to recover the investment by increasing prices which results in additional profits for the company. What should be the minimum additional profit that the company must earn each year in order to recover the cost of this equipment. The discount rate is 11% and the equipment is expected to have a useful life of 15 years. How will you calculate the minimum additional profit that the company must earn each year for 15 years?

Reference no: EM133168354

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