How much the owner of a building would be justified in paying for a sprinkler system that

Question:

How much the owner of a building would be justified in paying for a sprinkler system that will save $750 a year in insurance premiums if the system has to be Replace every 20 years and has a salvage value equal to 10%ofits initial cost? Assume money is worth7%.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...