Question
A company is considering buying a cnc machine. In today's dollars, it is estimated that the maintenance cost for the machine will be $32,000, $33,000,
A company is considering buying a cnc machine. In today's dollars, it is estimated that the maintenance cost for the machine will be $32,000, $33,000, $36,000, $37,000 and $39,000 for years 1 to 5, respectively. The general inflation rate is estimated to be 7% per year, ad the company will receive 16% return (interest) per year on its invested funds during the inflationary period. The company wants to pay for maintenance expenses in equivalent equal payments (in actual dollars) at the end of each of the five years. Find the amount of the company's payments.
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