Akron Coating and Adhesives (ACA) produces a hot melt adhesive that provides a strong bond between metals and thermoplastics when used for weather stripping, seals, gaskets, hand grips for tools, appliances, etc. ACA claims that by eliminating a primer coat, manufacturers can cut costs and reduce scrap. If Porter Cable is able to save $60,000 now and $40,000 per year thereafter by switching to the new adhesive, what is the present worth of the savings for three years at an interest rate of 10% per year?
Akron Coating and Adhesives (ACA) produces a hot melt adhesive that provides a strong bond between metals and thermoplastics when used for weather stripping, seals, gaskets, hand grips for tools, appliances, etc. ACA claims that by eliminating a primer coat, manufacturers can cut costs and reduce scrap. If Porter Cable is able to save $60,000 now and $40,000 per year thereafter by switching to the new adhesive, what is the present worth of the savings for three years at an interest rate of 10% per year?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Akron Coating and Adhesives (ACA) produces a hot melt adhesive that provides a strong bond between metals and thermoplastics when used for weather stripping, seals, gaskets, hand grips for tools, appliances, etc. ACA claims that by eliminating a primer coat, manufacturers can cut costs and reduce scrap. If Porter Cable is able to save $60,000 now and $40,000 per year thereafter by switching to the new adhesive, what is the present worth of the savings for three years at an interest rate of 10% per year?
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