A company wants to invest into a new production process and is trying to determine the minimum investment amount to break even at a MARR of 7%. The process is used 4,000 hours per year, and the hourly savings are expected to be $0.60. They will be using the process for five years, and it is expected to need yearly O & M expenses of $1,400.
a) What amount of initial investment is needed to satisfy the above requirements?
b) If the MARR becomes 5.5% will the process be profitable?