What is the most that you would pay to install the system

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Reference no: EM13189299

You are contemplating installing a security system (cameras, wiring, monitor, recorder etc) in one of your apartment buildings. If you install the system, your insurance carrier will reduce your annual premium each year for the 10 year useful life of the system. Your insurance premium is due at the beginning of the year and you expect to save $350 the first year. You expect that your savings will increase at an annual rate of 4%. What is the most that you would pay to install this system if your Minimum Acceptable Rate of Return (MARR) on such investments is 10% and the residual value of the system would be 25% of its initial cost?

Reference no: EM13189299

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