Problem
An investor is about to make an investment of $45,000 in equipment that will bring a net annual income of $20,000. The equipment will last for only three years, has no resale value, and removal cost is negligible. An engineer suggests an improvement in the equipment that will cost $35,000 and will extend its life to six years but will not change the annual income. The equipment will have no resale value after the six-year life; the removal cost is again negligible. The investor has MARR of 10%. Use the rate of return method to make a recommendation to him. Explain your reasons for recommendation.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.