What is the equivalent uniform annual worth of this system

Assignment Help Financial Management

Reference no: EM132065157

Ms. Child is considering the purchase of a new food packaging system. The system costs $144166. 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 $15080 at that time. Over the 15 year period, Ms. Child expects to pay $915 per year for maintenance. The system will save $4558 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: EM132065157

Questions Cloud

Shares of common stock outstanding-what is the company wacc : Dinklage Corp. has 7 million shares of common stock outstanding. What is the company’s WACC?

What is aftertax cost of debt : What is the aftertax cost of debt? What is the company’s WACC?

What is the current ytm of bonds and after-tax cost of debt : What is the current YTM of the bonds and after-tax cost of debt for this firm if the bonds are selling at par?

Find the implied growth rate applied by lenovo assuming : Find the implied growth rate applied by Lenovo assuming that the analyst’s estimates for the required rate of rate are correct.

What is the equivalent uniform annual worth of this system : Ms. Child is considering the purchase of a new food packaging system. What is the equivalent uniform annual worth (EUAW) of this system?

What is your effective annual interest rate : You are offered an investment with a quoted annual interest rate of 12.5% with quarterly compounding of interest. What is your effective annual interest rate?

What is the equivalent uniform annual worth : What is the equivalent uniform annual worth (EUAW) of this car at a 2% interest rate?

Exchange rate relationships between the US dollar and euro : Exchange rate relationships between the U.S. dollar and the euro have been volatile.

Use binomial model and not the put-call parity : If the risk- free rate of return is 5%, what is the put option price? Use binomial model and not the put-call parity for this question.

User Account

All Pages