A company plans to invest $15,000 dollars on new equipment with an 8 year life to reduce operating costs. It is estimated that the savings will be $5,000 the first year but decrease by $200 each year for the remainder of the equipment's life. Determine the net present worth (NPW) of the equipment at 7% interest. Express your answer in $ to the nearest $10.

A company plans to invest $15,000 dollars on new equipment with an 8 year life to reduce operating costs. It is estimated that the savings will be $5,000 the first year but decrease by $200 each year for the remainder of the equipment's life. Determine the net present worth (NPW) of the equipment at 7% interest. Express your answer in $ to the nearest $10.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A company plans to invest $15,000 dollars on new equipment with an 8
year life to reduce operating costs. It is estimated that the savings will be
$5,000 the first year but decrease by $200 each year for the remainder of
the equipment's life. Determine the net present worth (NPW) of the
equipment at 7% interest. Express your answer in $ to the nearest $10.

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