Galvanized Products is considering purchasing a new computer system for their enterprise data management system. The vendor has quoted a purchase price of $90,000. Galvanized Products is planning to borrow 1/4th of the purchase price from a bank at 18.00% compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $5,400 at that time. Over the 5-year period, Galvanized Products expects to pay a technician $27,000 per year to maintain the system but will save S4,000 per year through increased efficiencies. Galvanized Products uses a MARR of 15.00 %/year to evaluate investments. a. What is the present worth of this investment? %24 1504 Do all calculations to 5 decimal places and round final answer to 2 decimal places. Tolerance is 1.00,

Galvanized Products is considering purchasing a new computer system for their enterprise data management system. The vendor has quoted a purchase price of $90,000. Galvanized Products is planning to borrow 1/4th of the purchase price from a bank at 18.00% compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $5,400 at that time. Over the 5-year period, Galvanized Products expects to pay a technician $27,000 per year to maintain the system but will save S4,000 per year through increased efficiencies. Galvanized Products uses a MARR of 15.00 %/year to evaluate investments. a. What is the present worth of this investment? %24 1504 Do all calculations to 5 decimal places and round final answer to 2 decimal places. Tolerance is 1.00,

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 14P

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