Considering new automated cleaning equipment

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A company is considering new automated cleaning equipment. The engineer for the company has been asked to calculate the present worth of the proposed alternative. The initial cost of the machine is $78,000 and the annual saving that will be realized is $24,000. The annual operating cost will be $2,750, annual insurance is $2,200 paid at the beginning of the year, and it will need a scheduled maintenance performed at the end of the third year at a cost of $3,000. The market value at the end of the five year study period is 12.5% of the initial cost. If MARR = 8% what is the present worth of the investment?

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Reference no: EM13919856

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