What is the total present worth of the copier

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Question - New Vision engineering is considering purchasing an all-in-one copy machine that will last for the next 7 years and have no salvage value at the end of its life. The new machine will replace all office printers and be used for graphics copying and presentations. The machine will cost $6000 to purchase. In terms of cost savings for the printer replacement there is an annual savings of $1400 in the first year, $1200 in the second year, $1000 in the third year, and so on as it continues to decrease by $200. The savings for graphics copying is $2600 in the first year. The savings then decrease by 10% each year thereafter. What is the total present worth of the copier if the interest rate is 8%? Draw the cash flows.

Reference no: EM132560809

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