Yes, the question states a lab purchased a computer analyzer for $35,000. The la
ID: 1827936 • Letter: Y
Question
Yes, the question states a lab purchased a computer analyzer for $35,000. The lab also purchased a 5 yr maintanence contract for $3000 a year, payable at the end of each year. At the end of the first 5 years, the company upgraded the analyzer at a cost of $10,000. Following the upgrade the lab purchased another 5 year maintanence contract for $1000 a year, payable at the end of each year. Determine the present worth of the costa for purchasing the analyzer, upgrading the analyzer, and purchasing the two 5 year contracts, based on an annual interest rate of 12% compounded annualy. Show the cash flow diagram Thanks.
Explanation / Answer
Sorry I am unable to draw flow chart here
SOlution is
35,000 + 3000/(1.12) +3000/(1.12)^2 +3000/(1.12)^3 +3000/(1.12)^4 +13000/(1.12)^5 + 1,000/(1.12)^6 +1000/(1.12)^7+1000/(1.12)^8 +1000/(1.12)^9 +1000/(1.12)^10
Total sum = 54534.04 $
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