Nippon Steel’s expenses for heating and cooling a large manufacturing facility are expected to increase according to an arithmetic gradient beginning in year 2. If the cost is $550,000 this year (year 0) and will be $550,000 again in year 1, but then are estimated to increase by $40,000 each year through year 12, what is the equivalent annual worth in years 1 to 12 of these energy costs at an interest rate of 10% per year?

What will be an ideal response?


A = 550,000(A/P,10%,12) + 550,000 + 40,000(A/G,10%,12)
= 550,000(0.14676) + 550,000 + 40,000(4.3884)
= $806,254

Trades & Technology

You might also like to view...

Finishing products that can be thinned with water are ____________________

Fill in the blank(s) with the appropriate word(s).

Trades & Technology

Topics to discuss in salon conversation are:

What will be an ideal response?

Trades & Technology

Who wrote “A Letter Concerning Toleration,” which articulated key arguments for the principle of separation of church and state?

a. Louis XIV b. Baruch Spinoza c. Thomas Hobbes d. John Locke

Trades & Technology

Let x(t) and y(t) be as shown in Fig. 15.36, Find z(t) = x(t)*y(t).

Trades & Technology