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47. An expenditure of $20,000 is made to mod- ify a materials-handling system in a small job shop. This modification will result in first-year savings of $2,000, second-year savings of $4,000, and savings of $5,000 per year thereafter. How many years must the system last if a 25% re- tum on investment is required? The system is tailor-made for this job shop and has no salvage value at any time. Use beginning-of-year cash flow convention to solve this problem.

47. An expenditure of $20,000 is made to mod- ify a materials-handling system in a small job shop. This modification will result in first-year savings of $2,000, second-year savings of $4,000, and savings of $5,000 per year thereafter. How many years must the system last if a 25% re- tum on investment is required? The system is tailor-made for this job shop and has no salvage value at any time. Use beginning-of-year cash flow convention to solve this problem.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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47. An expenditure of $20,000 is made to mod- ify a materials-handling system in a small job shop. This modification will result in first-year savings of $2,000, second-year savings of $4,000, and savings of $5,000 per year thereafter. How many years must the system last if a 25% re- tum on investment is required? The system is tailor-made for this job shop and has no salvage value at any time. Use beginning-of-year cash flow convention to solve this problem.
Transcribed Image Text:47. An expenditure of $20,000 is made to mod- ify a materials-handling system in a small job shop. This modification will result in first-year savings of $2,000, second-year savings of $4,000, and savings of $5,000 per year thereafter. How many years must the system last if a 25% re- tum on investment is required? The system is tailor-made for this job shop and has no salvage value at any time. Use beginning-of-year cash flow convention to solve this problem.
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