Basics of Engineering Economy 1st Edition by Leland Blank,Anthony Tarquin

Exercise 1

Jim, the owner of Computers-on-Wheels, an on-site repair service, just purchased a $0,000 diagnostics system and software for PCs, laptops, and LANs.During the expected 5-year life, he determines that the annual recovery amount for this investment is $0,000/5 = $000.( a ) Explain why Jim has mistakenly underestimated the annual increase needed in revenue.( b ) Determine the required annual revenue increase for a 15% per year return.