Question: Please provide an excel file of the solution. MAKE SURE you upload it Many Chemicals Unlimited purchases a computer-controlled filter for $100,000. Half of the
Please provide an excel file of the solution. MAKE SURE you upload it
Many Chemicals Unlimited purchases a computer-controlled filter for $100,000. Half of the purchase price is borrowed from a bank at 15% compounded annually, and the rest will be financed with company's own money (still need to be included in the cash flow). The loan is to be paid back with 5 equal principal payments plus interest over a 5-year period. The filter is expected to last 10 years, at which time it will have a salvage value of $10,000. Over the 10-year period operating and maintenance costs are anticipated to equal $20,000 year; however, by making the investment, annual fines of $50,000 for pollution will be avoided. The firm expects to earn 12% on its investments. Determine each of the following measures of investment worth and state whether or not the filter purchase was economically sound. Present worth Annual worth Future worth Internal rate of return External rate of return
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