A major equipment purchase is being economically evaluated by a team of three design engineers...
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Accounting
A major equipment purchase is being economically evaluated by a team of three design engineers and one production engineer at Raytheon Aerospace. The agreed-upon estimates are P = $560,000, n = 6 years, and S = $100,000. The group disagrees, however, on the estimated annual net savings the equipment will generate. Estimates are summarized below. (a) Use PW analysis and a spreadsheet to identify which estimates, if any, indicate that the equipment is economically justified at a MARR of 8% per year. (b) For any estimate(s) indicating that the purchase is not justified, determine the breakeven number of years for the purchase to be justified.
Team Member
Joseph
Janice
Carlos
Mehmet
Savings Per Year, $
110,000
140,000
180,000
100,000
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