Question: Switching to water base technology will reduce the emission of volatile organic carbons (voc for firm's production process. The initial cost is S300,000 with the annual cost of S60,000 and savings of s95,000 in the first year. Savings are projected to increase by S3000 annually after the first year. The salvage value 10 years from now is projected to be S40,000. What rate of return will the firm make on this investment?
1. Draw cash flow
2. Derive equation and solve.