Contemporary Engineering Economics 6th Edition by Chan Park

تمرين 3

The Minnesota Metal Forming Company has just invested $500,000 of fixed capital in a manufacturing process that is estimated to generate an after-tax annual cash flow of $200,000 in each of the next five years. At the end of year 5, no further market for the product and no salvage value for the manufacturing process is expected. If a manufacturing problem delays the start-up of the plant for one year (leaving only four years of process life), what additional after-tax cash flow will be needed to maintain the same internal rate of return as would be experienced if no delay occurred?