A paper mill is considering two types of pollution control equipment. The firm wants a 12% rate

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A paper mill is considering two types of pollution control equipment.

Neutralization Precipitation Initial cost Annual chemical cost Salvage value Useful life, $700,000 $500,000 110,000 40,0


The firm wants a 12% rate of return on any avoidable increments of investment. Which equipment should be purchased?

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