Determine the equivalent total present worth

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Question: Chemical engineers at a Coleman Industries plant in the Midwest have determine that a small amount of a newly available chemical additive will increase the water repellency of Coleman's tent fabric by 20%. The plant superintendent has arranged to purchase the additives through a 5-year contract at $7000 per year, starting 1 year from now. He expects the annual price to increase by 12% per year thereafter for the next 8 years. Additionally. An initial investment of $35,000 was made now to prepare a site suitable for the contractor to deliver the additives. Use I = 15% per year to determine the equivalent total present worth for all these cash flows.

Reference no: EM131955754

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