What is the equivalent present worth of the device

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Reference no: EM13213063

A company is planning to buy an inspection device for $45,000. The expected life of the machine is 5 years, and the expected annual taxes and operating cost are $600 for the first year with an added increase per year of $100 per year for years 2 through 5. Maintenance costs will be zero for the first 2 years because of a warranty but are expected to be $1000 in year 3, $1500 in year 4, and $2000 in year 5. What is the equivalent present worth of the device? The company uses an interest rate of 10% per year compounded annually for economic evaluations.

Reference no: EM13213063

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