The cost of equipment to apply epoxy paint to a warehouse floor is $1400. Materials and supplies (masking tape, surface repair material, solvents, cleanup supplies, etc.) will cost $2.03 per ft2. Alternatively, a contractor can be hired annually to do the job for $3.25 per ft2. If the cost of the equipment will be recovered at i = 10% per year over a 3-year period with no salvage value, the number of square feet that must be treated each year to justify the equipment purchase is closest to: (a) 460 ft2 (b) 953 ft2 (c) 1148 ft2 (d) 2457 ft2
The cost of equipment to apply epoxy paint to a warehouse floor is $1400. Materials and supplies (masking tape, surface repair material, solvents, cleanup supplies, etc.) will cost $2.03 per ft2. Alternatively, a contractor can be hired annually to do the job for $3.25 per ft2. If the cost of the equipment will be recovered at i = 10% per year over a 3-year period with no salvage value, the number of square feet that must be treated each year to justify the equipment purchase is closest to: (a) 460 ft2 (b) 953 ft2 (c) 1148 ft2 (d) 2457 ft2
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...
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Question
The cost of equipment to apply epoxy paint to a
warehouse floor is $1400. Materials and supplies
(masking tape, surface repair material, solvents,
cleanup supplies, etc.) will cost $2.03 per ft2. Alternatively,
a contractor can be hired annually to
do the job for $3.25 per ft2. If the cost of the equipment
will be recovered at i = 10% per year over a
3-year period with no salvage value, the number of
square feet that must be treated each year to justify
the equipment purchase is closest to:
(a) 460 ft2
(b) 953 ft2
(c) 1148 ft2
(d) 2457 ft2
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