Calculate the present worth of all of the costs

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Reference no: EM13156476

The national Widget Company Purchased a computer system on January 1, 2012. The hardware expenses were as follows: $3900 on January 1, $500 on June 1, and $900 on November 1. There were also software fees of $350 per month, paid at the end of each month. Do the following using an annual interest of 8.0% and monthly compounding:

a) Draw a complete time line for the costs associated with the purchases of this computer system.

b) Calculate the present worth of all of the costs on January 1, 2012

c) If an option existed for an equivalent computer system to be purchased for $810 per month, paid at the end of each month in 2012, should they take this plan instead? Explain Answer!

Reference no: EM13156476

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