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A new equipment has been proposed by engineers to increase the productivity of a certain manual welding operation.


A new equipment has been proposed by engineers to increase the productivity of a certain manual welding operation. The investment cost is $25,000, and the equipment will have a market value of $5,000 at the end of a study period of five years. Increased productivity attributable to the equipment will amount to $10,000 per year after operating costs have been subtracted from the revenue generated by the additional production. If MARR s 10%, s investing in this equipment feasible? Use annual worth method. 

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