Determine the net present worth of the equipment at interest

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Reference no: EM13213014

A new piece of materials handling equipment costs $20,000 and is expected to save $7,500 the first year of operation. Maintenance and operating cost increases are expected to reduce the net savings by $500 per year for each additional year of operation until the equipment is worn out at the end of 8 years. Determine the net present worth of the equipment at an interest rate of 12% per year compounded annually.

Reference no: EM13213014

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