---**Insurance and Investment Analysis for Eddie's Precision Machine Shop**Eddie’s Precision Machine Shop currently has an insurance coverage of $700,000. The existing insurance premium is $1.00 for every $100 of coverage. The shop has the option to install a sprinkler system, which is estimated to cost $20,000 and have a lifespan of 20 years, with no salvage value. Annual maintenance for the sprinkler system amounts to $1,800. If the system is installed, it will be included in the shop’s total value for insurance. Consequently, the insurance premium will decrease to $0.40 for every $100 of coverage. Eddie applies a Minimum Attractive Rate of Return (MARR) of 15% per year.For further calculations, please access the TVM Factor Table Calculator [here](#).**Part A: Investment Analysis**Determine the annual worth of this investment: $ [Input Field]*Note: Keep all interim calculations accurate to 5 decimal places and subsequently round your final result to the nearest dollar. A tolerance of ±5 is acceptable.*---

Eddie's Precision Machine Shop is insured for $700,000. The present yearly insurance premium is $1.00 per $100 of coverage. A sprinkler system with an estimated life of 20 years and no salvage value can be installed for $20,000. Annual maintenance costs for the sprinkler system are $1,800. If the sprinkler system is installed, the system must be included in the shop's value for insurance purposes, but the insurance premium will reduce to $0.40 per $100 of coverage. Eddie uses a MARR of 15 %/year. Click here to access the TVM Factor Table Calculator

Eddie's Precision Machine Shop is insured for $700,000. The present yearly insurance premium is $1.00 per $100 of coverage. A sprinkler system with an estimated life of 20 years and no salvage value can be installed for $20,000. Annual maintenance costs for the sprinkler system are $1,800. If the sprinkler system is installed, the system must be included in the shop's value for insurance purposes, but the insurance premium will reduce to $0.40 per $100 of coverage. Eddie uses a MARR of 15 %/year. Click here to access the TVM Factor Table Calculator

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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