Determine the equivalent total present worth for cash flows

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A plant superintendent has arranged to purchase an additive through a 6-year contract at $5,000 per year, starting 1 year from now. Afterwards, he expects the annual price to increase by 3% per year thereafter for the next 12 years. Additionally, an initial investment of $70,000 was made now to prepare a site suitable for the contractor to deliver the additive. Use i=8% to determine the equivalent total present worth for all these cash flows.

Please show what each variable equals and formula and all steps in work

Reference no: EM131002369

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