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shayravirgen30
shayravirgen30
12.02.2021 • 
Business

Your company is considering purchasing a water filtration system. The system costs $50,000. It has an expected life of 7 years at which time its salvage value will be $7,500. Operating and maintenance expenses are estimated to be $2,000 per year. If the filtration system is not purchased, you will have to pay the city $12,000 per year for water purification. If the system is purchased, no water purification will be needed. You must borrow half of the purchase price, but cannot start repaying the loan for 2 years. The bank has agreed to three equal annual payments, with the first payment due at the end of year 2. The loan interest rate is 8% compounded annually. The internal interest rate is 10% compounded annually. Should the filtration system be purchased

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