You need to purchase a piece of equipment that you will keep for 15 years. It...

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You need to purchase a piece of equipment that you will keep for 15 years. It comes with a 3 year warranty. Assume that repair costs will be $4500 beginning at the end of the 4th year and every year thereafter, until you dispose of the equipment. a. What is the present worth of these costs (6pts)? b. What is the annualized cost of these repairs (over the 15 year life) (4 pts)? Use an interest rate of 6% per year, compounded annually You need to purchase a piece of equipment that you will keep for 15 years. It comes with a 3 year warranty. Assume that repair costs will be $4500 beginning at the end of the 4th year and every year thereafter, until you dispose of the equipment. a. What is the present worth of these costs (6pts)? b. What is the annualized cost of these repairs (over the 15 year life) (4 pts)? Use an interest rate of 6% per year, compounded annually

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a What is the present worth of these costs 6pts To compute the present worth of the future repair co... View the full answer