Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please use EXCEL and CLEARLY show equations Grow Fertilizers Company purchases a gravity settling tank of the $50,000 purchase price. The company finance 50% of

image text in transcribed

Please use EXCEL and CLEARLY show equations

Grow Fertilizers Company purchases a gravity settling tank of the $50,000 purchase price. The company finance 50% of the investment with a loan to be repaid with eights equal, semiannual principal payments plus interest of the balance at an annual interest rate of 12% compounded semiannually. It is anticipated that the tank will be used for 9 years and then be sold for $5000 at that time. Annual operating and maintenance expenses are estimated to be $60,000/year increasing 10% per year thereafter. A savings of $85,000/year in year 1 increasing by $2,000 per year thereafter are realized over the present filtration system. The firm uses a MARR (TVOM) of 15% for its economic analysis. Determine the following: Present worth. Equivalent annual worth. Internal rate of return. Draw conclusions about the economic feasibility of the investment

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financing California Real Estate Spanish Missions To Subprime Mortgages

Authors: Lynne P. Doti

1st Edition

184893601X, 978-1848936010

More Books

Students also viewed these Finance questions

Question

5. Benchmark current training practices.

Answered: 1 week ago