Maintenance costs for a particular productionmachine increase by $1000/year over the 5-yearlife of the equipment. The initial maintenance costis $2,856. Using an interest rate of 8 percentcompounded annually, determine the future worthequivalent for the maintenance costs.Answer is approx. 27,587. Can you show correctprocess to get there? Thanks!

Future value (FV) is the value of a current asset at a future date based on an assumed rate of…

e of the equipment. The initial mainténančé čóst he initial maintenance cost $2,856. Using an interest rate of 8 percent ompounded annually, determine the future worth quivalent for the maintenance costs. nswer is approx. 27,587. Can you show correct

e of the equipment. The initial mainténančé čóst he initial maintenance cost $2,856. Using an interest rate of 8 percent ompounded annually, determine the future worth quivalent for the maintenance costs. nswer is approx. 27,587. Can you show correct

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

Maintenance costs for a particular production
machine increase by $1000/year over the 5-year
life of the equipment. The initial maintenance cost
is $2,856. Using an interest rate of 8 percent
compounded annually, determine the future worth
equivalent for the maintenance costs.
Answer is approx. 27,587. Can you show correct
process to get there? Thanks!

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