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Determine the equivalent future worth of the savings

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Problem - The Southwestern Electricity and Water Authority authorized construction projects totaling $1.08 million to improve desalination plant efficiency and salinity-reduction technology for reject chemicals. Three bids from potential vendors were received in the amounts of $1.05, $1.063 and $1.075 million. Assume the savings will be realized immediately for each bid, were it accepted. Use an expected life of 10 years and the interest rate is 6% per year to do the following for the savings anticipated from the bids:

a. Determine the equivalent future worth of the savings.

b. Determine the equivalent annual worth of the savings.

c. Prepare a chart to visualize parts (a) and (b).

Reference no: EM132626284

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