The cash flows in the table below represent the potential annual savings associated with two different types of production processes, each of which requires an investment of $42,000. Assume an interest rate of 10%.

a) Determine the equivalent annual savings for each process.

The equivalent annual savings for process A are$

n Process A Process B 0 -$42,000 -$42,000 1 $18,060 $17,600 2 $16,170 $17,600 3 $14,280 $17,600 4 $12,390 $17,600