As chief engineer for a small manufacturing firm, you are considering whether to invest $40,000 in a new piece of equipment that will save $3000 annually in operating costs. If the equipment has an expected lifetime of 20 years and a salvage value of $12,000, is this an attractive investment at an interest rate of 6%? Why or why not?

NPV = ($1,848.57)

Explanation:

The NPV is the difference between the PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.  

NPV of an investment:  

NPV = PV of Cash inflows - PV of cash outflow  

Initial cost = 40,000

Salvage value = 12,000

Savings in operating cost = 3,000

PV of annual savings : 3000× (1- 1.06^-20)/0.06 =34,409.76

PV of salvage value = 12,000 × 1.06^(-20)=3,741.65

Total PV of cash inflow 34,409.76  + 3,741.65= 38,151.42

NPV = 38,151.42038  - 40,000 = $(1,848.57)

The project should not be implemented because it would delete the shareholders wealth by $1,848.57

NPV = ($1,848.57)

wheres the chart? so i can answer.

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.