Present worth of the savings due to the reconfiguration

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Costs associated with the manufacture of miniature high-sensitivity piezoresistive pressure transducers is $84,000 per year. A clever industrial engineer found that by spending $20,000 now to reconfigure the production line and reprogram two of the robotic arms, the cost will go down to $56,000 next year and $58,000 in years 2 through 5. Using an interest rate of 15% per year, determine the present worth of the savings due to the reconfiguration.

Reference no: EM132312907

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