What is the present worth of the tester

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Problem: A small device used to test printed circuit boards has a first cost of $45000. The tester is expected to reduce labor costs and improve the defect detection rate to bring about savings of $23000 per year. Additional operating costs are expected to be $7300 per year. The salvage value of the tester will be $5000 in five years. The after-tax MARR is 12% and the tax rate is 42%. What is the present worth of the tester? Is it an acceptable investment?

Reference no: EM133496611

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