Business, 19.03.2021 05:30 muffinpuncher

A company purchases a piece of equipment for $6.5M. After fifteen years, the salvage value is $4M. The annual insurance cost is 5% of the purchase price, the electricity cost is $2,000/mo, the maintenance cost is $5,000 quarterly, and replacement parts regularly cost $1,250/yr. The effective annual interest rate is 4%. Neglecting taxes, what is most nearly the present worth of the equipment if it is expected to save the company $1M per year?

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A company purchases a piece of equipment for $6.5M. After fifteen years, the salvage value is $4M. T...

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