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I need help on parts A, B, and C please! ****PLEASE USE MARR 12% INSTEAD OF THE 10% IN QUESTION! 05.01-PR009. (Use MARR as 12%)
I need help on parts A, B, and C please!
****PLEASE USE MARR 12% INSTEAD OF THE 10% IN QUESTION!
05.01-PR009. (Use MARR as 12%) Aerotron Electronics is considering the purchase of a water filtri m to sit in circuit board manufacturing. The system costs $10.000. It has an expected life of 7 years which time its salvage value will be $7.500. Operating and maintenance expenses are estimated to be $2.000 per year. Tiltration system is not purchased, Aerotron Electronics will have to pay Bay City $12.000 per year for water purification. If the system is purchased, no water purification from Bay City will be needed Aerotron Electronics must borrow half of the purchase prise, but it cannot start repaying the loan for 2 years. The bank has agreed to three equal annual payments, with the first payment due at the end of year 2. The loan interest rate is 8% compounded annually. Acrotron Electronics MARR is compounded annually. = 20000 - CE1,8%,) - CA/P, 8%, 3) 12" = 88381 (A)What is the annual worth of this investment? 1.08 Aw = PNCAIP, 12%,7) EPMT(13%,7,) pm 2.40133 900 AW = 10000 + -20000 - 8301/A, 130/9,3) (PF) , LAIP, 12%, 7) + 7500 (A/F , 12%,7) = gaga 09412 (B)What is the decision rule for judging the attractiveness of investments based on annual worth? (C)Should Aerotron Electronics buy the water filtration systemStep by Step Solution
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