Reference no: EM13847494
A proposed $2.5 million investment at a 70 MGY (million gallons per year) facility will save the facility $1.1 million/ year in energy costs. The equipment needs maintenance every 3 years (year 3, 6, 9), costing $300,000 and the equipment has a useful life of 11 years. Assuming an interest rate of 9.5%/ yr, should the plant make this investment? Why or why not?
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What is the operating cash flow and cash flow to creditors
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Should the plant make this investment?
: A proposed $2.5 million investment at a 70 MGY (million gallons per year) facility will save the facility $1.1 million/ year in energy costs. The equipment needs maintenance every 3 years (year 3, 6, 9), costing $300,000 and the equipment has a usefu..
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The account paid interest compounded annually
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