Repeat parts (a) through (c) of Problem 12 assuming that Carlisle's board of directors has decided that
Question:
Repeat parts (a) through (c) of Problem 12 assuming that Carlisle's board of directors has decided that since this action is based on a Federal government citation, no financial gain should be expected and the appropriate value of MARR is 0.
Data from problem 12
Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of \(\$ 18,500\) per year. An emission reduction filter will cost \(\$ 75,000\) and will have an expected life of 5 years. Carlisle's MARR is 10 percent/year.
a. What is the present worth of this investment?
b. What is the decision rule for judging the attractiveness of investments based on present worth?
c. Is the filter economically justified?
d. State at least one noneconomic factor that might influence this decision.
Step by Step Answer:
Principles Of Engineering Economic Analysis
ISBN: 9781118163832
6th Edition
Authors: John A. White, Kenneth E. Case, David B. Pratt