Silastic-LC-50 is a liquid silicon rubber designed to provide high clarity, superior mechanical properties, and short cycle time for high speed manufacturers.

One high-volume manufacturer used it to achieve smooth release from molds. The company’s projected growth would result in silicon costs of $26,000 next year and costs increasing by

$2000 per year through year 5. The interest rate is 10% per year.

(a) What is the present worth of these costs using tabulated factors?

(b) How is this problem solved using a spreadsheet? Using a financial calculator?