Question

A plasma arc furnace is being considered for the incineration of medical wastes at a public...

A plasma arc furnace is being considered for the incineration of medical wastes at a public hospital. The initial investment is $3,000,000 and annual revenues are expected to be $1,800,000 over the six-year life of the furnace. Annual expenses will be $1,000,000 at the end of year one. The salvage value of the furnace after six years is $700,000. Assume MARR is 10%.

What is the discounted payback period of the furnace (in years)?

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