Question
In: Economics
A concrete plant is considering a new piece of equipment with an initial cost of $75,000...
A concrete plant is considering a new piece of equipment with an initial cost of $75,000 and a salvage value of $15,000 at the end of its 25-year useful life. The annual maintenance cost for this piece of equipment is projected to be $10,500. The equipment will produce an annual labor savings of $24,000. What is the approximate projected before-tax rate of return on the equipment?
Solutions
Expert Solution
The given data is executed in an excel:
Excel IRR function is used to solve the problem.
Before-tax rate of return on the equipment =
17.76%
The excel calculation and formula used are shown below:
Comment if a handwritten
solution is required
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thank you
Rahul Sunny answered 2 years agoRelated Solutions
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