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Aerotron Electronics is considering the purchase of a water filtration system to assist in circuit board manufacturing. The system costs $260,000. It has an expected
Aerotron Electronics is considering the purchase of a water filtration system to assist in circuit board manufacturing. The system costs $260,000. It has an expected life of 7 years at which time its salvage value will be $7,500. Operating and maintenance expenses are estimated to be $18,000 per year. If the filtration system is not purchased, Aerotron Electronics will have to pay Bay City $28,000 per year for water purification. If the system is purchased, no water purification from Bay City will be needed. Aerotron Electronics must borrow 1/2 of the purchase price, but they cannot start repaying the loan for2 years. The bank has agreed to 3 equal annual payments, with the 1st payment due at the end of year 2. The loan interest rate is 8%, compounded annual Aero ron Electronics A Rs )% compounded annually. Click here to access the TVM Factor Table Calculator Your answer is incorrect. Try again 56,040.91 What is the annual worth of this investment
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