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Question - Your Area Director wants to purchase new Lockout/Tagout equipment for your maintenance personnel. The total purchase price is quoted by Grainger to be $11,843. It is estimated that the purchase of the new equipment will cut your lost work days by 31% because of improved awareness and lockout efficiency. It is estimated that this purchase will save you an estimated $6,573 per year in the costs associated with the lost work days. However, you have the following maintenance cost schedule.
Year
Maintenance
1
$200
2
$250
3
$300
4
$350
5
$400
6
$450
Required - What are your knowns for the EUAW calculation for this proposed purchase at an interest rate of 4%?
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