Case Study 9 A Major Equipment Purchase Is Being Considered by Metro Atlanta

Multiple Choice

Case Study 9
A major equipment purchase is being considered by Metro Atlanta. The initial cost is determined to be $1,000,000. It is estimated that this new equipment will save $100,000 the first year and increase gradually by $50,000 every year for the next 6 years. MARR=10%
-The payback period for this equipment purchase.

A) 8 years
B) 6 years
C) 5 years
D) 10 years.