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Use Excel to answer the following question: Sundance Detective Agency purchased new surveillance equipment with the...

Use Excel to answer the following question:
Sundance Detective Agency purchased new surveillance equipment with the following estimates. Note: The year index is k = 1, 2, 3, ... to calculate the maintenance costs and extra revenues for the corresponding years.

First cost ($) 1,050
Annual maintenance cost ($ in year k) 70 + 5k
Extra revenue ($ in year k) 200 + 50k
Salvage value ($ at the end of the useful life) 600


(a) Prepare a cash-flow (CF) table, do present worth (PW) analysis using an appropriate Excel built-in function to calculate the discounted payback period x with a return of 10% per year.
(b) For a preliminary conclusion, should the equipment be purchased if the actual useful life is 7 years? Comment.

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