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Taser Company has to purchase some new equipment. Two manufacturers have provided the following 5 information: 6 Equipment A Equipment B 7 Initial costs $75,200
Taser Company has to purchase some new equipment. Two manufacturers have provided the following 5 information: 6 Equipment A Equipment B 7 Initial costs $75,200 $82,600 8 Estimated life 5 years 5 years 9 Annual savings $21,850 $23,825 10 11 Because the company requires a present value analysis, the following present value factors are furnished: 12 Present Value of $1.00 @ 07 Present Value of an Annuity of $1.00 @ 10% 13 Period 1 14 NE 15 0.90909 1.73554 2.48685 3 0.90909 0.82645 0.75131 0.68301 0.62092 16 17 4 3.16987 18 5 3.79079 19 QU 20 Required: Determine the present value of annual savings for each piece of equipment and the net 21 present value. Show your calculations clearly. 22 b. What is the payback for each piece of equipment? Show your calculations clearly. 23 C. Which investment is preferable? Why
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