Hewlett-Packard has completed a study indicating that $50,000 in reduced maintenance this year (i.e., year zero) on one of its processing lines resulted from improved wireless monitoring technology.a. If Hewlett-Packard considers these types of savings worth 20% per year,find the equivalent value of this result after 5 years.b. If the $50,000 maintenance savings occurs now, find its equivalent value3 years earlier with interest at 20% per year.
Hewlett-Packard has completed a study indicating that $50,000 in reduced maintenance this year (i.e., year zero) on one of its processing lines resulted from improved wireless monitoring technology.a. If Hewlett-Packard considers these types of savings worth 20% per year,find the equivalent value of this result after 5 years.b. If the $50,000 maintenance savings occurs now, find its equivalent value3 years earlier with interest at 20% per year.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Hewlett-Packard has completed a study indicating that $50,000 in reduced maintenance this year (i.e., year zero) on one of its processing lines resulted from improved wireless monitoring technology.
a. If Hewlett-Packard considers these types of savings worth 20% per year,
find the equivalent value of this result after 5 years.
b. If the $50,000 maintenance savings occurs now, find its equivalent value
3 years earlier with interest at 20% per year.
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