What annual benefit is need to purchase heat exchanger unit

Reference no: EM132152190

Question: A firm is about to begin pilot plant operation on a process it has developed. One item of optional equipment that could be obtained is a heat exchanger unit. The company finds that a unit now available for $30,000 could be used in other company operations. It is estimated that the heat exchanger unit wl be worth $35,000 at the end of eight years. This seemingly high salvage value is due primarily to the fact that the $30,000 purchase price is really a rare bargain. If the firm believes 15% is an acceptable rate of return, what annual benefit is needed to justify the purchase the heat exchanger unit?

Reference no: EM132152190

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