Justify buying the heat exchanger unit

Assignment Help Business Economics
Reference no: EM131806967

A firm is about to begin pilot plant operation, and it could add an optional heat exchanger unit. A unit is now available for $30,000, and it is estimated that the heat exchanger unit will be worth $35,000 after 8 years for use in other company operations. This high salvage value is because the $30,000 purchase price is really a rare bargain. If 15% is an appropriate rate of return, what annual benefit is needed to justify buying the heat exchanger unit?

Reference no: EM131806967

Questions Cloud

Average age of engineering students : The average age of engineering students at graduation is a ttle over 23 years. This means that the working career of most engineer
What are some of dilemmas addresses that are still important : What are some of the dilemmas she addresses that are still important today? What is a current news item that is similar to this issue?
Discuss how to account for partnership contributions : Prepare a written paper that discusses Accounting for Partnerships
What annual sum must he set aside : An engineer wishes to have $5 million by the time he retires in 40 years. Assuming 15% nominal interest, compounded continuously, what annual sum must he set as
Justify buying the heat exchanger unit : If 15% is an appropriate rate of return, what annual benefit is needed to justify buying the heat exchanger unit?
Equipment purchase prove : Assuming interest at 8%, did the equipment purchase prove to be desirable?
Make all necessary entries in appropriate governmental fund : Make all necessary entries in the appropriate governmental fund general journal and government-wide governmental activities general journal
What uniform deposits starting : What uniform deposits starting 3 years from now and continuing through year 16 are needed,if the account earns 6% interest?
Georgia institute of technology : Contributed by Hamed Kashani, Saeid Sadri, and Baabak Ashuri, Georgia Institute of Technology How much should a new graduate pay in 10 equal annual payments

Reviews

Write a Review

Business Economics Questions & Answers

  What is the firms profit-maximizing output

A perfectly competitive firm has the cost curves drawn in the following diagram. If the firm's output sells for $16 per unit, what is the firm's profit-maximizing output? Why?

  Calculate the unemployment rate

In July, 2013, in the economy of Sandy Island, 10,000 people were employed and 1,000 were unemployed. During August, 2012, 80 people lost their jobs and did not look for new ones, 20 people quit their jobs and retired, 150 people were hired or recall..

  Describe elasticities and the nature of the two products

A 10% increase in the price of pizza causes a 10% drop in the quantity of both pizza and beer sold. Describe elasticities and the nature of the two products.

  Several units of a homogeneous product as single package

A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer’s demand for the product is Qd = 40 - 0.5P, and the marginal cost of production is $50. Determine the optimal number of units to put in a..

  Find the golden rule quantity of capital per worker

Consider a numerical example using the Solow growth model, suppose that F(K,N)=K^0.5N^0.5 with d=0.1,s=0.2,n=0.01,and z=1, and take period to be a year. Determine capital per worker, income per capita, and consumption per capita in the steady state. ..

  Gross domestic product equals

Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals $200 billion, and government spending equals $260 billion, then:

  Elastic demand would be considered optional

Some economists argue that the price elasticity of demand can be used to determine whether a good or service is a luxury or a necessity. In medical case, a procedure with inelastic demand would be considered a medical necessity, while care with elast..

  Prefer cat bond with an indemnity trigger

Why might a government entity (say the California Earthquake Authority) prefer a cat bond with a parametric trigger but an insurance or reinsurance company (say American Family) prefer a cat bond with an indemnity trigger?

  How the efficiency wage might cause unemployment

Might a job retraining program be a more useful policy to address structural unemployment than to address frictional unemployment? Explain with the help of a graph how the minimum wage might cause unemployment; Explain with the help of a graph how th..

  Each of workers can manufacture

Assume that there are 10 million workers in Canada also that each of these workers can manufacture

  What rate of return did he receive on his investment

He received no dividend for the ninth year. At the end of the ninth year he sold his stock for $6000. What rate of return did he receive on his investment?

  Is behavior consistent with model of maximizing behavior

When prices are (p1;p2) = (1;2) a consumer demands (x1;x2) = (1;2), and when prices are(p1;p2) = (2;1) the consumer demands (x1;x2) = (2;1). Is this behavior consistent with the model of maximizing behavior?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd