1. You are considering burying a piece of industrial equipment to automate a part of your production process. This automation will save labor costs by as much as $35,000 per year over 10 years. The equipment costs $200,000. Should you purchase the equipment if your interest is 12%?

2. Determine the interest rate (i) that makes the pairs of cash flows below economically equivalent.

Year	Pair 1	Pair 2
0	$0	0
1	$2000	$2500
2	$2000	$1875
3	$2000	$1406
4	$2000	$1055
5	$2000	$791
6	$2000	$595

3. Calculate the Net Present Worth (or Net Present Value), and benefit-cost (B/C) ratio of the following project, assuming an 8% discount rate. Also determine the projects Internal Rate of Return (IRR).

Year	Cash Flow ($)
0	-400.00
5	-100.00
15	+500.00
30	+2,500.00

4. Consider the following data on an asset:

Cost of the asset, I	$235,000
Useful life, N	5 years
Salvage value, S	$60,000

Compute the annual depreciation allowances and the resulting book values, using (1) the straight-line depreciation method, and (b) the double-declining-balance method.