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A piece of equipment will save $8000 the first year and the savings will increase by...

A piece of equipment will save $8000 the first year and the savings will increase by 5% per year for the next 10 years. If the interest rate is 10% per year, how much can you spend on the equipment based on the savings?
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Answer #1
The Amount to be spend $ 64086/- based on savings
Year Cash flows PVF @ 10% Present values
1 8000 0.909091 7272.727
2 8400 0.826446 6942.149
3 8820 0.751315 6626.597
4 9261 0.683013 6325.388
5 9724.05 0.620921 6037.87
6 10210.25 0.564474 5763.421
7 10720.77 0.513158 5501.448
8 11256.8 0.466507 5251.382
9 11819.64 0.424098 5012.683
10 12410.63 0.385543 4784.833
11 13031.16 0.350494 4567.341
Prsent values of Annual savings 64086
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