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A piece of equipment costs $35,000 and has a life of 5 years. This equipment is...

A piece of equipment costs $35,000 and has a life of 5 years. This equipment is expected togenerate revenues of $1000 per MONTH. It requires yearly maintenance at a cost of $3,400per year. The minimum rate of return (MARR) is 12% per year.

(a) If interperiod interest is earned, should they purchase the equipment?

(b) If interperiod interest is not earned, should they purchase the equipment? (Show all calculations)

Engineering   Civil-Engineering   
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