Carlisle company has been cited and must invest in equipment to reduce stack emissions or face epa fines of $18,500 per year. an emission reduction filter will cost $75,000 and have an expected life of 5 years. carlisle’s marr is 10%/year.
a. what is the annual worth of this investment?
b. is the filter economically justified? why?

equivalent annual cost: 19,784.81

The investment is not economically justified as it is cheaper to pay the fines than invest in the equipment to avoid them.

Explanation:

We calcualte the PMT of a 75,000 dollars equipment at 10%

PV75,000

time5

rate0.1

C                 $ 19,784.811

EPA fines:       $ 18,500.00  

differential:          (1, 284.81)

answer; descriptive statistics;

answer///ability to capture the attention of users;