What is the equivalent annual worth of the costs

Reference no: EM13219150

Ford Motor Company was able to reduce by 80% the cost required for installing data acquisition instrumentation on test vehicles by using MTS-developed spinning wheel force transducers.

(a) If this year's cost (i.e., end of year 1) is expected to be $2000, what was the cost the year before installation of the transducers?

(b) If the costs are expected to increase by $250 each year for the next 4 years (i .e., through year 5), what is the equivalent annual worth of the costs (years 1 through 5) at an interest rate of 18% per year?

Reference no: EM13219150

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