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A special-purpose machine tool set would cost $20000 The tool set will be financed by a $10000 bank loan repayable in two equal annual installments at 10% compounded annually The tool is expected

A special-purpose machine tool set would cost $20,000. The tool set will be financed by a $10,000 bank loan repayable in two equal annual installments at 10% compounded annually. The tool is expected to provide annual (material) savings of $30,000 for two years and is to be depreciated by the MACRS three-year recovery period. The tool will require annual O&M costs in the amount of $5,000. The salvage value at the end of the two years is expected to be $8,000. Assuming a marginal tax rate of 40% and MARR of 15%, what is the net present worth of this project? You may use Table P10.19 as a worksheet for your calculation. TABLE PI0.I9

May 14 2020 View more View Less

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