Wrangler Western has some of its jeans stone-washed under a contract with an independent contractor, Almos Garment Corp. If Almo

Question

2 years ago

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Wrangler Western has some of its jeans stone-washed under a contract with an independent contractor, Almos Garment Corp. If Almo

s’ operating cost is $34,000 per year for years 1 and 2 and then it increases by 6% per year through year 10, what is the year-zero present worth of the machine operating cost at an interest rate of 12% per year? The present worth of the machine operating cost is determined to be $

Business

1 answer:

Novay_Z [31] · Answer 1 · 2022-08-22T23:34:59+03:00

Answer:

The present of worth of machine operating cost is $ 228,061.55

Explanation:

In calculating the present worth of the machine operating cost,I grew the cost of $34000 per year from year 3 onwards by 6% , thereafter I discounted the increased machine operating cost with the applicable discount factor in each year as shown in the attached spreadsheet.

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