The SEWA (Southwestern Electricity and Water Authority) authorized construction projects totaling $1.07 million to improve desalinization plant efficiency and salinity-reduction technology for reject chemicals. Three bids from potential vendors were received in the amounts of $1.06, $1.053, and $1.045 million. Assume the savings will be realized immediately for each bid, were it accepted. Use an expected life of 10 years and i = 6% per year to do the following for the savings anticipated from the lower-than authorized bids: (a) Determine the equivalent present worth of the savings. (b) Determine the equivalent annual worth of the savings. (c) Develop a column chart for the equivalent annual worth for the savings for each bid.
What will be an ideal response?
(a) Present worth is the value of the savings for each bid
Bid 1: Savings = $10,000
Bid 2: Savings = $17,000
Bid 3: Savings = $25,000
(b) and (c) Spreadsheet for A values and column chart
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