K Manufacturing would like to install a machine costing $37,500 with a life of 12 years to bring in benefits to the company of $5,100 per month. The monthly expenses for the machine are $4,650. If the MARR that the company uses is 12% per year, what should be the minimum salvage value as a percentage of the initial machine cost that the company should get at the end of the machine life to justify installing the machin

$12,585

Explanation:

initial investment = -$37,500

then you have 143 cash flows = $5,100 - $4,650 = $450

the last cash flow = $450 + salvage value

we can use an annuity factor to determine the present value of the first 143 payments = $450 x 75.89853 (PV annuity factor, 1%, 143 periods) = $34,154.34

not considering the last cash flow, the NPV = -$37,500 + $34,154.34 = $3,345.66

we need to find the future value of $3,345.66:

FV = $3,345.66 x (1 + 12%)¹² = $13,034.61

the last cash flow = $13,034.61

salvage value = $13,034.61 - $450 = $12,584.61 ≈ $12,585

answer; customers within the organization

it established new limitations on use and disclosure for marketing purposes, prohibited selling medical information, expanded individuals’ rights to accessing their own information, and to obtain restrictions from certain disclosures of protected heath information to health plans.