Computer system for their enterprise data management system

Assignment Help Business Economics

Reference no: EM13772438

Galvanized Products is considering 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 one-fourth of the purchase price from a bank at 15 percent 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 $5,000 at that time. Over the 5-year period, Galvanized Products expects to pay a technician $25,000 per year to maintain the system but will save $55,000 per year through increased efficiencies. Galvanized Products uses a MARR of 18 percent/year to evaluate investments.

a) What is the present worth of this investment?

b) Should the new computer system be purchased?

Reference no: EM13772438

Questions Cloud

General theory of employment-interest and money : In The General Theory of Employment, Interest, and Money, John Maynard Keynes wrote: If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coal mines which are then filled up to the surface with town rubbish..

What is the optimal quantity pear produces : Pear Inc. is a monopolist producing the iWatch, a wristwatch mobile communication device. The iWatch is a device that will last for exactly two periods, after everyone will switch to Boogle Glass, a eyeglass mobile communication device that is not ye..

Mismanaged organizational stress : Distrust, disrespect, and animosity pertain to which component of indirect costs associated with mismanaged organizational stress?

Does the policy raise any ethical issues : Legally, how did CMS go about deciding that it would reduce reimbursement for hospital-acquired pressure ulcers and other conditions? Does this policy make sense to you? Why? Does the policy raise any ethical issues

Computer system for their enterprise data management system : Galvanized Products is considering 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 one-fourth of the purchase price from a bank at 15 per..

Protein deficiency and overconsumption : Describe risks associated with protein deficiency and overconsumption.

What is the process of software design : What is the process of software design. What tools are used in software design.

Relative humidity and mean radiant temperature : Describe relative humidity and mean radiant temperature. How does the dew point affect condensation?

If the fed purchases treasury bills from banks : If the Fed purchases Treasury Bills from banks:

User Account

All Pages