A Caterpillar motor grader costs $290,658.35. The company can put $21,900 down payment on the motor grader. The company estimates that the annual Operations and Maintenance (O&M) cost of the new motor grader will be $2800 per year. They also estimate that the O&M costs will increase each year at the rate of $25 per year through the life of the motor grader. The motor grader will generate an average annual savings to the company of $29,500. The company also estimates that they can sell the motor grader at the end of its life for $73,000. Calculate the Net Present Worth of the motor grader. The motor grader has a 15-year life and the Minimum Acceptable Rate of Return (MARR) is 4-1/2% per year. Calculate the NAW of the Caterpillar motor grader.

Determine the APR Determine the periodic annual interest rate Determine the number of compounding periods per year, m Determine the number of years of cash flow Determine the total number of compounding periods, n Draw the Cash Flow diagram Determine the NAW