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PCM Thermal Products uses austenitic nickel-chromium alloys to manufacture resistance heating wire. The company is considering a new annealing-drawing process to reduce costs. If the new process will cost $3.25 million dollars now, how much must be saved each year to recover the investment in 6 years at an interest rate of 15% per year

Sagot :

Answer:

the amount that need to be saved each year in order to recover the investment is $858,770

Explanation:

The computation of the amount saved each year is shown below:

= Costing of the new process × (A/P, 15%, 6)

= $3,250,000 × 0.26424

= $858,770

hence, the amount that need to be saved each year in order to recover the investment is $858,770

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