Considering the purchase of new food packaging system

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Reference no: EM131566123

Ms. Child is considering the purchase of a new food packaging system. The system costs $209460. Ms. Child plans to borrow one-third of the purchase price from a bank at 4.5% per year compounded annually. The loan will be repaid using equal, annual payments over a 7-year period. The system is expected to last 15 years and have a salvage value of $14373 at that time. Over the 15 year period, Ms. Child expects to pay $1004 per year for maintenance. The system will save $5408 per year because of efficiencies. Ms. Child uses a MARR of 8% to evaluate investments. What is the equivalent uniform annual worth (EUAW) of this system?

Reference no: EM131566123

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