Question: A special-purpose machine tool set would cost $30, 000. The tool set will be financed by a $10, 000 bank loan repayable in two equal
A special-purpose machine tool set would cost $30, 000. The tool set will be financed by a $10, 000 bank loan repayable in two equal annual installments at 10% compounded annually. The tool is expected to provide annual (material) savings of $30, 000 for two years and has a CCA rate of 100%. The tool will require annual O&M costs in the amount of $5, 000. The salvage value at the end of the two years is expected to be $8, 000. Assuming a marginal tax rate of 40% and MARR of 15%, what is the net present worth of this project? For the following problems, please use Excel to do calculations. Use the posted Excel file as a guide to design your own Excel file. Don't use the posted Excel file directly
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
