I try to solve the question on Engineering Economy 5th Edition for the subject of Time Value of Money, in chapter 5, no 5-35, p 216.
AW= Annual Worth
S= Salvage Value (market) at the end of the period.
N= Period (year)
I= Initial Investment
To solve the above problem then:
AW(15%) = X-$1,000,000(A/P,15%,8) + S(A/F,15%,8)
=X-$1,000,000(0.2229) + 0(0.0874)
= X – $222,900
We know that the cost of recycle is $1/sq yard and selling price is $3/sq yard, then the revenue is $2/sq yard, to know the minimum square yard of carpet to be recycle, then
$222,900 / $2 = 111,450 Sq Yard in total
13,931.25 Sq Yard / Year.
Sullivan, W.G., Wicks, E. M., & Koelling, C. P. (2011). Engineering Economy 5th Edition, Chapter 5, p189