A manufacturing process has present operating costs of $10.9million annually and waste disposal costs of 3.3million. The plant manager wishes to upgrade the process by installing new equipment at a capital cost of $23.3million. This will reduce the annual operating and waste disposal costs to $7.1 and $1.4million respectively. Compare the two processes on a present worth basis, assuming no salvage value. Use 12% interest for 10years as a basis for calculation?
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