Question: An electronic device is available that will reduce this year's labor costs by $10,000. The equipment is expected to last for eight years. If labor

An electronic device is available that will reduce this year's labor costs by $10,000. The equipment is expected to last for eight years. If labor costs increase at an average rate of 7% per year and the interest rate is 12% per year.
a. What is the maximum amount that we could justify spending for the device?
b. What is the uniform annual equivalent value (A) of labor costs over the eight-year period?

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