Insurance premiums, What is the maximum it would be

Insurance premiums

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Reference no: EM13737900

What is the maximum it would be reasonable for the owner of a building to pay for a new sprinkler system if it would save $785 per year in insurance premiums. The owner's cost of money is 7.00%/yr. Assume the system would have a life of 20 yrs and a salvage value equal to 14% of it's first cost. Note: salvage value is what he would sell it for at the end of the 20 yrs.

Reference no: EM13737900

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