What is the net present worth for this new computer system

Assignment Help Financial Management

Reference no: EM131604518

Kermit is considering purchasing a new computer system. The purchase price is $138523. Kermit will borrow one-fourth of the purchase price from a bank at 10 percent per year compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $7016 at that time. Over the 5-year period, Kermit expects to pay a technician $20,000 per year to maintain the system but will save $79212 per year through increased efficiencies. Kermit uses a MARR of 12 percent to evaluate investments. What is the net present worth for this new computer system?

Reference no: EM131604518

Questions Cloud

Unpaid internships take unfair advantage : Do you feel employers who offer unpaid internships take unfair advantage of students’ knowledge and skills?

How fast is r changing at that moment : Suppose R1 is held constant at 10 ohms, and that R2 is increasing at 2 ohms per minute when R2 is 20 ohms. How fast is R changing at that moment?

Develop an ability to identify and assume an assigned role : Develop an ability to identify and assume an assigned role. Illustrate the importance of hidden (undirected) issues that arise from a detailed analysis

Offered big production contract by new client : After spending $11,000 on client-development, you have just been offered a big production contract by a new client.

What is the net present worth for this new computer system : Kermit is considering purchasing a new computer system. What is the net present worth for this new computer system?

Describe salary and benefit package : Describe salary and benefit package that you would recommend for each of positions listed below and advise how you determined that salary and benefit package.

What would be a few ideas for strategies for helping student : what would be a few ideas for strategies for helping students cope. What would also could be some cultural challenges that I might encounter

What is the modified ratio for flood control project : Using the PW, what is the modified B-C ratio for the flood control project?

Discuss the implications of the law for employee privacy : Discuss the implications of the law for employee privacy. Summarize the main points of ERISA in no more than a page.

User Account

All Pages