Chemical engineers at a Coleman Industries plant in the Midwest have determined 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 additive through a 7-year contract at $9000 per year, starting 1 year from now. He expects the annual price to increase by 12% per year starting in the 8th year and thereafter through year 15. Additionally, an initial investment of $45,000 was made now to prepare a site suitable for the contractor to deliver the additive. Use i=15% per year to determine the equivalent total present worth for all these cash flows.

Answer rating: 100% (QA)

Using the information provided in the question we get Equivalent Present Worth 35... View the full answer