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Business, 24.10.2019 23:43 XxMikeLearnsxX9288

Aerotron electronics is considering purchasing a water filtration system to assist in circuit board manufacturing. the system costs $42,000. it has an expected life of 7 years at which time its salvage value will be $8,500. operating and maintenance expenses are estimated to be $2,000 per year. if the filtration system is not purchased, aerotron electronics will have to pay bay city $8,500 per year for water purification. if the system is purchased, no water purification from bay city will be needed. aerotron electronics must borrow 1/2 of the purchase price, but they cannot start repaying the loan for 2 years. the bank has agreed to 3 equal annual payments, with the 1st payment due at the end of year 2. the loan interest rate is 6.5% compounded annually. aerotron electronics� marr is 13.0% compounded annually. what is the present worth of this investment?

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