Pretest Midterm Economics

Annual income will also increase by $125,000

• +A

• -A

• +P

• +F

the company anticipates needing $4 million to purchase the industrial-strength lasers

• +P

• -A

• +A

• -P

The system will save $1,400,000 per year in labor and materials

• -A

• -P

• +A

• +P

an additional operating and maintenance cost of $300,000 per year

• -P

• -A

• +P

• +A

a salvage value of $250,000 after their expected economic life of five years.

• -F

• +F

• -P

• -A

Annual receipts

• -A

• +A

• -P

• +P

If the specialized tools are purchased, they will cost $2,500,000

• +P

• -P

• +A

• -A