Question: Galvanized Products is considering purchasing a new computer system for their enterprise data managernent system. The vendor has quoted a purchase price of $110,000. Galvanized
Galvanized Products is considering purchasing a new computer system for their enterprise data managernent system. The vendor has quoted a purchase price of $110,000. Galvanized Products is planning to borrow 1/4 th of the purchase price from a bank at 15.00% compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $5,400 at that time. Over the 5 -year period, Galvanized Products expects to pay a technician $21,000 per year to maintain the system but will save $51,000 per year through increased efficiencies. Galvanized Products uses a MARR of 15.00%/ year to evaluate investments. a. What is the present worth of this investment? $ Do all calculations to 5 decimal ploces and round final answer to 2 decimal places, Tolerance is 1.00. b. What is the decision rule for iudging the attractiveness of imvestments based on present worth? c. Should the new computer system be purchased? a. What is the present worth of this investment? $ Do all calculations to 5 decimal places and roun b. What is the decision rule for judging the attractiv e purchased? PW>0Accept;PW able Calculat o Reject
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