What is the before-tax present worth of the extruder

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Reference no: EM131452431

The XYZ Corporation is planning to purchase an extruder. The purchase price of the extruder $350,000. XYZ plans to make a down payment of 25% of the first cost of the extruder and to make a 7 year, 10%, yearly payment loan for the rest of the first cost of the extruder. XYZ believes that the extruder can be sold for $75,000 at the end of its 15 year service life. The new extruder will increase xYz's annual income by $90,000. Maintenance and operating costs expected to be $4,000 during the first year to increase by each year. XY7 uses a before-tax MARR of 12% preliminary economic studies. What is the before-tax present worth of the extruder to XYZ?

Reference no: EM131452431

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