Business, 27.06.2020 23:01 rubydelgado

You are considering investing $65,000 in new equipment. You estimate that the net cash flows will be $18,000 the first year, but will increase by $2,500 per year the next year and each year thereafter. The equipment is estimated to have a 10-year service life and a net salvage value of $5,000 at that time Assume an interest rate of 9%. (a) Determine the annual capital cost (ownership cost) for the equipment.
(b) Determine the equivalent annual savings (revenues)
(c) Determine whether this is a wise investment.

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You are considering investing $65,000 in new equipment. You estimate that the net cash flows will be...

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