1- A company purchased a quality control system for $45,410 which requires $9,561 per year maintenance...

1- A company purchased a quality control system for $45,410 which requires $9,561 per year maintenance fees for the first 5 years, after which the maintenance fees will increase by 12% per year for the upcoming 7 years. Determine the equivalent total present worth value of preached system during the 12 years operation at i = 15% per year.

For the below Cash Flow find PW using 10% interest rate.

years	$ cost
0	2,955
1	-
2	-
3	3,000.00
4	3,100.00
5	3,200.00
6	3,300.00
7	3,400.00
8	3,500.00

Solutions

Expert Solution

The given data is executed in an excel:

1. Equivalent total present worth = -$107,438

2. PW = $14,554

The excel calculation and formula used are shown below:

Please don't forget to rate the answer if its helpful, thank you.

Rahul Sunny answered 1 year ago

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