Camus Blalack, process engineer, knew that the acceptance of a new process design would depend on its economic feasibility.

Camus Blalack, process engineer, knew that the acceptance of a new process design would depend on its economic feasibility. The new process design required new equipment and an infusion of working capital. The equipment would cost $300,000 and its cash operating expenses would total $60,000 per year. The equipment would last for seven years but would need a major overhaul costing $30,000 at the end of the fifth year. At the end of seven years, the equipment would be sold for $24,000. An increase in working capital totaling $30,000 would also be needed at the beginning. This would be recovered at the end of the seven years.