Find the present worth at time 0 of the chrome plating costs shown in the cash flow diagram. Assume i = 7% per year.
The present worth of the chrome plating is determined to be_____ $ .
Ans: $6050.7
Explanation:
PW = 2000 + [1800 - 200(A/G, 7%, 5)] * (P/A, 7%, 5)
= 2000 + [1800 - 200(1.865)] * 4.100
= 2000 + (1427 * 4.100)
= $6050.7
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