What would be the maximum initial price

Reference no: EM131996231

Question: Maximum price to justify. What would be the maximum initial price that would be justified if a new machine were added with the following properties? It would cost 200 dollars a year to maintain in the first year and each year after that the maintenance cost would increase by 100 dollars a year. It would save 4000 a year in raw materials. The planning horizon is 20 years and the interest rate is 12%.

Reference no: EM131996231

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