A company is considering purchasing a new machine tool. In addition to the initial purchase and installation costs, management is concerned about the machines maintenance costs, which are expected to be $1,000 at the end of the first year of the machines life and increase 8 percent/year thereafter. The machine tools expected life is 15 years. Company management would like to know the equivalent worth for expected costs. If the firms time value of money is 10 percent/year compounded annually,

a. what is the present worth equivalent?

b. what is the annual worth equivalent?