Question

1. Henry, owner of the Monster Gym located in Black River, wants to replace all its equipment. The investment will cost $180,000 and will generate $55,000 revenue which will increase $5,000 every year for 5 years. The salvage value will be $25,000 after the 5 years. Assume the equipment has a 20% MARR

2. Since the operator requires at least a 20% return on their investments, should the machine be purchased? Why?

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.