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Under consideration is the purchase of a new air conditioning system. It costs $30,000 to purchase and will be used for 5 years. The electric
Under consideration is the purchase of a new air conditioning system. It costs $30,000 to purchase and will be used for 5 years. The electric bill paid at the end of each year will be reduced by $9,000 with the new system. The new unit will require a $2,000 overhaul at the end of the 3rd year. The new unit will have a salvage value of $11,000. The interest rate is twelve percent. What is the present equivalent value of the savings yielded by the new system
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