A pulp and paper company is evaluating whether it should retain the current bleaching process that uses chlorine dioxide or replace it with a proprietary "oxypure" process. The relevant information for each process is shown. Use an interest rate of 15% per year to perform the replacementstudy.

Transcribed Image Text:

Current Process xpre Process Original cost 6 years ago,$ Investment cost -450,000 -700,000 now, S Current market 25,000 value, S -180,000 Annual operating cost, S/year Salvage value, S Remaining life, -70,000 50,000 10 years