Business, 22.07.2021 16:10 brillamontijo
The johnson company pays $2000 a month to a trucker to haul wastepaper and cardboard to the city dump. The material could be recycled if the company were to buy a $60,000 hydraulic press baler and spend $30,000 a year for a labor to operate the baler $2000 per year for the estimated 500 bales a year that would be produced. A wastepaper company will pick up the bales at the plant and pay johnson $23 per bale for them. Use an annual cash flow analysis and interest rate of 8% to recommend whether it is economical to install and operate the baler.
What price for the bales of wastepaper would make Johnson indifferent between buying or not buying the baler?
a. NO, $26.66
b. YES. 19.45
c. YES. $21.85
d. NO. $28.75
Answers: 3
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