Instructions for Questions 8-10 Labco Scientific sells high-purity chemicals to universities, research laboratories and pharmaceutical companies. The company wants to invest in new equipment that will reduce shipping costs by better matching the size of the completed products with the size of the shipping container. The new equipment is estimated to cost $575,000 to purchase and install now. (Source: Blank and Tarquin, 81 edition) i= 8% A=? 10 1 N 3 4 5 A= Represents savings every year $575,000 Question 9 (10 points) The correct equation to calculate how much Labco must save each year for 5 years in order to justify the investment at an interest rate of 8% per year is: (a) A= 575,000[0.05(1+0.05)* /((1+0.05)-1)] (b) A=575,000[0.05/((1+0.05)*-1)] (c) A= 575,000[0.08(1+0.08)*/((1+0.08)*-1)] (d) A=575,000(1+0.08) Question 10 (10 points) How much must Labco save each year for 5 years in order to justify the investment at an interest rate of 8% per year? (a) $124,384 (b) $144,015 (c) $99,372 (d) $115,000