A customer is going to buy a brand new pump and motor. It has an initial cost of $10,000. The lifetime of the pump is fifteen years and is estimated to save about $1,000 per year. There is also an additional cost of maintenance at $300 per year with the pump. At the end of its lifetime, the pump will have a salvage value of $0. The interest rate is at 4%. Find the annual value of the pump and what is the salvage value for the pump in order to break even?

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A: Nominal interest rate = 5.8% Inflation rate = 1.7%

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A: Annual dividend = $12 Price = $100 Tax rate = 21%

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A:

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