Spent on purchasing the new technology

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Reference no: EM131937448

A large food-processing corporation is considering using new technology to speed up and eliminate waste in the potato-peeling process. The system will save the company $1,224,000 per year in labor and materials. However it will require an additional operating and maintenance (O&M) cost of $268,000. Annual income taxes will also increase by $300,000. The system is expected to have a 12 years service life and will have a salvage value of $239,000. If the company's MARR is 16.2%, what is the maximum amount that should be spent on purchasing the new technology?"

Reference no: EM131937448

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