Determine the equivalent annual worth of projected savings

Reference no: EM13218395

A rural utility company provides standby power to pumping stations using diesel-powered generators. An alternative has arisen whereby the utility could use natural gas to power the generators, but it will be a few years before the gas is available at remote sites. The utility estimates that by switching to gas, it will save $15,000 per year, starting 2 years from now. At an interest rate of 8% per year, determine the equivalent annual worth(years 1 through 10) of the projected savings.

Reference no: EM13218395

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