What is the simple payback period of the funace

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Reference no: EM13724030

A plasma arc furnace has an internal combustion temperature of 7,000 Celsius and is being considered for the incineration of medical wastes at a local hospital. the initial investment is $300,000 and annual revenues are expected to be $175,000 over the six-year life of the furnace. Annual expenses will be $100,000 at the end of year one and will increase by $5,000 each year thereafter. The resale value of the funace after six years is $20,000. (5.6,5.8)

a) what is the simple payback period of the funace?

b) what is the internal rate of return on the funace?

Reference no: EM13724030

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