Galvanized Products is considering purchasing a new computer system for their enterprise data management system. The vendor has quoted a purchase price of $120,000. Galvanized Products is planning to borrow one-fourth of the purchase price from a bank at 13% compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $5,500 at that time. Over the 5-year period, Galvanized Products expects to pay a technician $28,000 per year to maintain the system but will save $51,000 per year through increased efficiencies. Galvanized Products uses a MARR of 17%/year to evaluate investments. Required:
a. What is the present worth of this investment?
b. Should the new computer system be purchased?

Jordan, inc. sells fireworks. the company’s marketing director developed the following cost of goods sold budget for april, may, june, and july. april may june july budgeted cost of goods sold $62,000 $72,000 $82,000 $88,000 jordan had a beginning inventory balance of $3,000 on april 1 and a beginning balance in accounts payable of $14,600. the company desires to maintain an ending inventory balance equal to 15 percent of the next period’s cost of goods sold. jordan makes all purchases on account. the company pays 65 percent of accounts payable in the month of purchase and the remaining 35 percent in the month following purchase. required prepare an inventory purchases budget for april, may, and june. determine the amount of ending inventory jordan will report on the end-of-quarter pro forma balance sheet. prepare a schedule of cash payments for inventory for april, may, and june. determine the balance in accounts payable jordan will report on the end-of-quarter pro forma balance sheet.