How much would vteps inc be willing to pay for this device

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Reference no: EM132025329

Your team is looking at purchasing a piece of equipment that you anticipate will result in an estimated $15,000 reduction in expenses during its first year of operation.

However, your team expects the savings of expenses to increase at a rate of 3% per year after the first year (i.e., $15,450 in EOY 2, etc.).

Additional operating expenses for the piece of equipment (maintenance, electric power, etc.) are $3,500 annually, and they increase by $250 per year thereafter (i.e., $3,750 in EOY 2, etc.).

It is anticipated that the device will last for 10 years and will have no market value at that time If the MARR = 20% per year, how much would VTEPS. Inc. be willing to pay for this device?

Reference no: EM132025329

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