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ANSWER BOTH PARTS OF QUESTION 2 2A ) A garment company has a contract to stone-wash...

ANSWER BOTH PARTS OF QUESTION 2

2A ) A garment company has a contract to stone-wash Wrangler Jeans. Its operating costs are $22,000 per machine in Years 1 and 2, then they increase by 8% per year through Year 10. What is the equivalent present worth of the operating costs at an interest rate of 10% per year.


2B) Repeat the previous problem assuming an interest rate of 8% per year, instead.

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