The engineers in a manufacturing company have proposed an investment of a new concrete batching plant to improve the quality of their products. The estimates are shown in Table 2. The minimum...

The engineers in a manufacturing company have proposed an investment of a new
concrete batching plant to improve the quality of their products. The estimates are
shown in Table 2. The minimum attractive rate of return (MARR) of the company
per year is 15%.

Table 2: Estimates of New Concrete Batching Plant
Estimates
Initial investment $250,000
Salvage value $50,000
Annual operating cost $35,000
Annual revenues $90,000
Study period 10 years

a. Calculate the equivalent annual worth (AW) of the given investment.
b. What annual revenue should be attained to reach breakeven.

Extracted text: 6. The engineers in a manufacturing company have proposed an investment of a new concrete batching plant to improve the quality of their products. The estimates are shown in Table 2. The minimum attractive rate of return (MARR) of the company per year is 15%. 7. Table 2: Estimates of New Concrete Batching Plant Estimates Initial investment Salvage value Annual operating cost $250,000 $50,000 $35,000 $90,000 10 years Annual revenues Study period a. Calculate the equivalent annual worth (AW) of the given investment. b. What annual revenue should be attained to reach breakeven.