1. A statement identifying the engineering economics method used in determining the answer

2. Cash Flow Diagrams for each component of the question/answer

3. The formula(s) used for each calculation e.g., P = F / (1 + i)N (after the set of formulas for each problem have been identified, factors can be used to simplify the calculations and avoid errors)

4. A proper statement defining the use of the factors found in Appendix B Interest Factors for Discrete Compounding e.g., Present Worth of a Future Amount at 8% annually for 25 years should be written as: (P/F, 8%, 25) = 0.1460 prior to its use in a calculation

5. A concluding statement answering the ultimate question

Question 2 (30%) Cardinal Bakery, whose current earnings put them in the thirty-five (35) percent marginal tax bracket, is considering replacing another piece of equipment for $25,000. The equipment will be depreciated using the straight line method over the four (4) year useful life to a salvage value of $5,000. It is estimated that the equipment will increase Cardinal bakery's earnings by $8,000 for each of the four (4) years. Should the new equipment be purchased assuming Cardinal's MARR of 10%