(a) Determine the annual capital cost (ownership cost) for the equipment.

The annual capital cost is $

(b) Determine the equivalent annual savings (revenues).

The equivalent annual savings are $

(c) Determine whether this is a wise investment.

The annual equivalent worth is $

Is this a good investment?

You are considering investing $60,000 in new equipment. You estimate that the net cash flows will be $20,000 during the first year, but will increase by $600 per year the next year and each year thereafter. The equipment is estimated to have a 10-year service life and a net salvage value of $10,000 at that time. Assume an interest rate of 13%