3. A company decides to buy a new equipment with life of 6 years; Purchase and installation cost: $100,000 Annual maintenance cost: $10.000 Annual energy cost savings: $45,000 Salvage value: $20,000 MARR: 12% Tax rate: 34% Equipment life: 5 years for depreciation purposes Determine; a) equivalent present worth using 5 years depreciation schedule b) IRR Recovery Year 1 2 3 3-Year Property 33.33% 44.45% 14.81% 7.41% 5-Year Property 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% 7-Year Property 14.29% 24.49% 17.49% 12.49% 8.93% 8.92% 8.93% 4.46% 5 6 7 10-Yeay Property 10.00% 18.00% 14,40% 11.52% 9.22% 7.37% 6.55% 6.55% 6.56% 6.55% 3.28% 15-Year Property 5.00% 9.50% 8.55% 7.70% 6.93% 6.23% 5.90% 5.90% 5.91% 5.90% 3.91% 5.90% 5.91% 5.90% 5.91% 2.5% 9 10 11 12 13 14 15 16 17 18 19 20 21 20-Year Property 3.750% 7.219% 6.677% 6.177% 5.713% 5.285% 4.888% 4.522% 4.46296 4.461% 4.462% 4.461% 4.4629 4.461% 4.46296 4.461% 4.46296 4.4617 4.462% 4.461% 2.23198 3. A company decides to buy a new equipment with life of 6 years; Purchase and installation cost: $100,000 Annual maintenance cost: $10.000 Annual energy cost savings: $45,000 Salvage value: $20,000 MARR: 12% Tax rate: 34% Equipment life: 5 years for depreciation purposes Determine; a) equivalent present worth using 5 years depreciation schedule b) IRR Recovery Year 1 2 3 3-Year Property 33.33% 44.45% 14.81% 7.41% 5-Year Property 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% 7-Year Property 14.29% 24.49% 17.49% 12.49% 8.93% 8.92% 8.93% 4.46% 5 6 7 10-Yeay Property 10.00% 18.00% 14,40% 11.52% 9.22% 7.37% 6.55% 6.55% 6.56% 6.55% 3.28% 15-Year Property 5.00% 9.50% 8.55% 7.70% 6.93% 6.23% 5.90% 5.90% 5.91% 5.90% 3.91% 5.90% 5.91% 5.90% 5.91% 2.5% 9 10 11 12 13 14 15 16 17 18 19 20 21 20-Year Property 3.750% 7.219% 6.677% 6.177% 5.713% 5.285% 4.888% 4.522% 4.46296 4.461% 4.462% 4.461% 4.4629 4.461% 4.46296 4.461% 4.46296 4.4617 4.462% 4.461% 2.23198