15. 2.60 Ford Motor Company was able to reduce by 80% the cost required for installing data acquisition instrumentation on test vehicles by using MTSdeveloped spinning wheel force transducers. The cost this year (i.e., end of year 1)

is expected to be $2000.

(a) What was the cost the year before installation of the transducers?

(b) If the costs are expected to increase by $250 each year for the next 4 years, what is the equivalent annual worth of the costs (years 1–5) at an interest rate of 7% per year?Page 73