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A company is offered a new computer program that is supposed to provide cost savings. The cost of the program and the necessary equipment is
A company is offered a new computer program that is supposed to provide cost savings. The cost of the program and the necessary equipment is $230,000, and it will have a useful life of 5 years and a salvage value (or salvage value) of $55,000. The annual operating costs of the program will be $50,000 per year. In the 3rd year an upgrade is required at a cost of $20,000 to be paid one time. If the company's MARR is 18%, how much must the equivalent annual cost savings be to justify implementing this program?
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