New equipment will require an initial $500,000 investment today, with expected positive annual returns of $92,500 each year over the following 10 years. The MARR is 1%. Determine the present worth of this investment.
I = 1%
t = 10 yrs
NPW = -500000 + 92500 * (P/A, 1%, 10)
= -500000 + 92500 * 9.471305
= 376095.67
As NPW is positive, this investment should be selected
New equipment will require an initial $500,000 investment today, with expected positive annual returns of $92,500...
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