Bailey, Inc. is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $100,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would increase $2000 per year using the gang punch, but raw material costs would decrease $12,000 per year. MARR is 5%/year.

Draw the Cash Flow Diagram and find the annual worth of this investment.