Input conveyor of a coal-processing plant

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If an electromagnet is installed on the input conveyor of a coal-processing plant, it will pick up scrap metal in the coal. Removing this scrap will save an estimated $1200 per year in costs associated with machinery damage. The electromagnetic equipment has an estimated useful life of 5 years and no salvage value. Two suppliers have been contacted: Leaseco will provide the equipment in return for three beginning-of-year annual payments of $1000 each; Saleco will provide the equipment for $2783. If the MARR is 10%, should the project be done, and if so, which supplier should be selected?

Reference no: EM131806418

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