Question

You would like to evlauate pursuing a new computing tool for your team. The new workstation would impact 10 of your campany staff and cost about $5,500. You expect the new work stations to have a yearly maintenance and operation cost of 20% of the initial cost. At the end of the 3 year life cycle you think the new workstation can have a salvage value of 5% of the initial cost. What is the present worth of the new stations if you use an internal MARR of 17%

Answer 1

Answer:

-7,759.29 dollar

Explanation:

cost of maintenance and operation

initial cost of $5500 x 20%

= 1100 Dollars

salvage value

initial cost of $5500 x 5%

= $275

pw = -5500-1100(p/a,17%,3) +275(p/f,17%,3)

pw = -5500-(1100*2.21) + (275*0.6244)

pw = -5500-2431+17.71

= -7759.29

so pw, that is present worth of new stations using internal MARR of 17% is -7759.29 dollars