Question: Rick Grimes and Daryl Dixon are evaluating an investment in a hydraulic press for a stamping operation. The initial cost of the press is

Rick Grimes and Daryl Dixon are evaluating an investment in a hydraulic

Rick Grimes and Daryl Dixon are evaluating an investment in a hydraulic press for a stamping operation. The initial cost of the press is $400,000 and is expected to have a useful life of 10 years. Maintenance costs will be $20,000 per year. The hydraulic press will also increase stamping output and reduce labour; saving the company $10,000 in the first year, $30,000 in year 2, and $75,000 in each subsequent year. The equipment has a salvage value of $15,000. If the company's MARR is 15%, should the partners recommend this project go ahead?

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