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Business, 13.11.2019 20:31 diego4325

Galvanized products is considering purchasing a new computer system for their enterprise data management system. the vendor has quoted a purchase price of $100,000. galvanized products is planning to borrow 1/4th of the purchase price from a bank at 12.00 % 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 $6,000 at that time. over the 5-year period, galvanized products expects to pay a technician $24,000 per year to maintain the system but will save $50,000 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? b) should the new computer system be purchased?

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