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Business, 29.04.2021 04:10 jose55221

A firm is about to begin pilot plant operation on a process it has developed. One item of optional equipment that could be obtained is a heat exchanger unit. The company finds that a unit now available for $30,000 could be used in other company operations. It is estimated that the heat exchanger unit will be worth $35,000 at the end of 8 years. This seemingly high salvage value is due primarily to the fact that the $30,000 purchase price is really a rare bargain. If the firm believes 15% is an appropriate rate of return, what annual benefit is needed to justify the purchase of the heat exchanger unit

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