Note to Instructors and Students

Many of the problems in this chapter are similar to problems in previous chapters. This similarity is intentional. It is designed to illustrate the use of different measures of merit on the same problem.

Crush Auto smashers can purchase a new electromagnet for moving cars at a cost of $20,000. At the end of its useful life, the electromagnet will be worth $1,000. If Crush’s MARR is 12 percent/year, how many years must the electromagnet last so that its capital recovery cost will be $3,000/year or less?

Answer rating: 100% (QA)

Capital recovery CR 3000 Cost C 20000 Salvage value S 1000 MAR... View the full answer