The aged but centrally located golf course you manage does not have an in-ground automated water sprinkling system. Instead, it is done manually which is a tedious and laborious task. You are considering installing an automated system.

a) You project that the automated system will result in annual savings of about $40,000 at the end of the next 12 years. Ignore taxes. What is the maximum price you would pay for the system. Assume an interest rate of 6% and annual compounding.

b) You project that the automated system will result in annual savings of $50,000 at the end of the first 6 years and $30,000 at the end of the next 6 years. What is the maximum price you would pay for the system. Assume an interest rate of 6% and annual compounding

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Analyzing the Automated Sprinkler System Investment Heres how to determine the maximum price you can ... View the full answer