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university of southern california Operations And Supply Chain Management Assignment Help - A heat exchanger

Question - A heat exchanger is being installed as part of a plant modernization program. It costs $80,000, including installation, and is expected to reduce the overall plant fuel cost by $20,000 per year. Estimates of the useful life of the heat exchanger range from an optimistic 12years to a pessimistic 4 years the most likely value is 5 years. Using the range of estimates to compute the mean life, determine the estimated before-tax rate of return. Assume the heat exchanger has no salvage value at the end of its useful life.

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