Your firm spends $500,000 per year (end of the year payment) in regular maintenance of its equipment. Due to the COVID-19 economic downturn, the firm considers forgoing these maintenance expenses for the next three years. If it does so, it expects it will need to spend $2 million in year 4 (end of the year payment) replacing failed equipment. 

Does the IRR rule work for this decision?, For what MARR is forgoing maintenance a good decision?

Answer rating: 100% (QA)

Ans Given Spending in regular maintenance of equipment ... View the full answer