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5. Homework Problem from book 6-21 Eddie's Precision Machine Shop is insured for $700,000. The present yearly insurance premium is $1.00 per $100 of coverage.

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5. Homework Problem from book 6-21 Eddie's Precision Machine Shop is insured for $700,000. The present yearly insurance premium is $1.00 per $100 of coverage. A sprinkler system with an estimated life of 20 years and no salvage value can be installed for $20,000 ntenance costs for the sprinkler system are $400. If the sprinkler system is installed, the system must be premium will reduce to S0,40 per $100 of cluded io the shop's value for insurance purposes, but the insurance included ia the shop's value for insurance coverage, Eddie uses a MARR of percen /year. What is the future worth of this irivestment? What is the decision rule for judging the attractiveness Is the sprinkler system economically justified? based on future worth? of investments

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