What is the present worth of this investment

Assignment Help Microeconomics
Reference no: EM13180934

Aerotron Electronics is considering purchasing a water filtration system to assist in circuit board manufacturing. The system costs $40,000. It has an expected life of 7 years at which time its salvage value will be $7,500. Operating and maintenance expenses are estimated at $2,000 per year. If the filtration system is not purchased, Aerotron Electronics will have to pay Bay City $12,000 per year for water purification. If the system is purchased, no water purification from Bay City will be needed. Aerotron Electronics' MARR is 10% compounded annually. What is the present worth of this investment?

Reference no: EM13180934

Questions Cloud

Monosaccharide or an amino acid : Which of the following means of transport would most likely be used for moving a medium-sized molecule (like a monosaccharide or an amino acid) from a low concentration on the outside of a cell to a high concentration on the inside of a cell?
Dissenting opinions accomplish : Dissenting opinions accomplish all of the following EXCEPT
Briefly describe the research to the mall owner : What is the probability that the mean rain in the area will be higher this year than in the previous five years? How will you briefly describe the research to the mall owner?
Making education a more valued : How can we as a society (and individuals) go about making education a more valued and appreciated societal institution? Please share your thoughts and ideas.
What is the present worth of this investment : Aerotron Electronics is considering purchasing a water filtration system to assist in circuit board manufacturing. The system costs $40,000. It has an expected life of 7 years at which time its salvage value will be $7,500. Operating and maintenan..
Developed through socialization : Examine your own political attitudes and how they have been developed through socialization. I know it says your own but I am just having a hard time with it.
What is the standard deviation of acres burned per year : A machining process produces specialty metal parts used in aircraft. A particular part is designed to be 62 cm in length. The machine is set to cut at 62 cm but the process is stochastic with a mean length of 62 cm and a standard deviation of 0...
What about card limits-credit card solicitations : It can be agreed that banks are acting in a responsible manner when it comes to credit card solicitations. This is reflection in the way they are prompt in making the customer aware of the dues and payment clearance date.
What might pfizer hadid pfizer violate any ethical standards : In the 1990s, Pfizer, Inc., developed a new antibiotic called Trovan (trovafloxacin mesylate). Tests showed that in animals Trovan had life-threatening side effects, including joint disease, abnormal cartilage growth, liver damage and a degenerati..

Reviews

Write a Review

Microeconomics Questions & Answers

  Estimate salvage value of the equipment

The depreciation schedule for a machine has been arrived at by several methods. The estimated salvage value of the equipment at the end of its 6-year life is $600. Identify the resulting depreciation.

  Define the the monopolists profit maximization problem

Assume that a profit maximizing monopolist faces an inverse demand function give by p(.), where p'(y),0, and a total cost function given by c(y), where c'(y)>0. Suppose the government wishes to combat the undesirable allocational effects of a mono..

  Explain real rate of return in the stock market

Suppose the price that year rose by 8% and the real rate of return in the stock market was 4%. Your friend says she or he was being more than fair giving you more than the rate of inflation as a return, What do you think and Why?

  Computing the expected dividends

New Light Corporation has just created a solar panel capable of generating 200 percent more electricity than any solar panel currently on the market. As a result, New Light is expected to experience a 15% yearly growth rate for the next 5 years.

  Compare the incentives of a deficit nation

Compare the incentives of a deficit nation to undergo international adjustment against those of a surplus nation. Determine who would benefit more and explain your reasoning.

  What constitutes a perfectly competitive market structure

Your report should be approximately two pages in length, you should use diagrams wherever appropriate and clearly state any assumptions underpinning your analysis.

  Describe the various terms in the ad curve

This is a challenging question and involves algebraically solving system of two equations given by AD abd AS curves. The equations for the curves are given through the following:

  Calculate how much will the profit or loss

Refer to the above data. If the product price is $55 at its optimal output, will the firm realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations.

  Briefly describe the conditions for monopsony

Discuss Khalid's proposed business in terms of a competitive market and in terms of a monopolistic competitive market. Which type of market structure might he hope develops? Why? Does that development depend on him? Explain.

  Computing price-income and advertising elasticity

A firm has estimated the following demand function for its product:

  Create a log return series from the stock price index

Create a log return series from the stock price index (the log return is the change in the logarithm of the stock price). Estimate an appropriate pure AR(p) model and an appropriate pure MA(q) model and compare these to a mixed ARMA(1,1) model.

  What is acs fixed cost and what is the variable cost

what are the expressions for AC's total revenue ,marginal revenue, total cost and marginal cost as a function of output? what is AC's fixed cost and what is the variable cost?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd