Your firm is currently paying $3,000 a year to a commercial garbage collection agency to haul waste paper to the city dump. The paper could be sold as waste paper if it were baled and strapped. A paper baler is available at the following conditions:
Purchase price = $6,500
Labor to operate baler = $3,500/year
Strapping material = $300/year
Life of baler = 30 years
Salvage value = $500
MARR = 10%/year
If it is estimated that 500 bales would be produced per year, what would the selling price per bale to a wastepaper dealer have to be to make this project acceptable? Assume no inflation.
