Question

sep up-to-cate with security updaten,xos, and imprevements choose Check for Updates 7. Colgate Printing Co. (CPC) has the book binding contract for the Ralph Brown library. The library pays $25 per book to CPC. CPC binds 1,000 books every year for the library. Ralph Brown library is considering the option of binding the books in-house in the basement of the library complex. In order to do this, the library would have to invest in a binding machine and other printing equipment at a cost of $100,000. The useful life of the machine is 12 years, at the end of which time, the machine is estimated to have a salvage value of $12,000. The annual operating and maintenance costs of the machine are estimated to be $10,000. Assuming an interest rate of 6%, what is the capital recovery? is the investment justified ? cost of binding per book for the in house option? $21.22 per book . $25.15 per book $17.33 per book . $11.22 per book

Answer 1

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