Ms. Child is considering the purchase of a new food packaging system. The system costs $105265. Ms. Child plans to borrow one-third of the purchase price from a bank at 4.5% per year compounded annually. The loan will be repaid using equal, annual payments over a 7-year period. The system is expected to last 15 years and have a salvage value of $21608 at that time. Over the 15 year period, Ms. Child expects to pay $667 per year for maintenance. The system will save $6460 per year because of efficiencies. Ms. Child uses a MARR of 8% to evaluate investments. What is the net present worth of the system?

Enter your answer as follows: 1234

Round your answer.

Do not use a dollar sign ("$"), any commas (",") or a decimal point (",").

-5228.0000

-44783.0 margin of error +/ - 0.5%

This question has 2 parts: the loan and the net present worth. First, find how much the loan payment will be. Then, find the net present worth. Watch the loan interest vs. The interest used for the NPW.

Answer rating: 100% (QA)

NPW 44783 PVIFA 45 n7 58927 Annual loan payments 105265 3 58927 595454 Present value of the annual ... View the full answer