What net annual income must be received to economically

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Reference no: EM131202678

During the feasibility study of a project, the initial estimated cost for design and construction is $3.7 million. It is anticipated that the cost to maintain and operate the facility after completion of construction will be $250,000 per year. Assuming the owner must obtain a return on the initial investment of 15%, what net annual income must be received to economically justify the project? Assume no salvage value after using the facility for 12 years.

Reference no: EM131202678

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