2. The cost for manufacturing a component used in intelligent interface converters was $23,000 the first year. There is a 30% chance the cost will increase by 2% per year, a 40% chance the cost will increase by 3% per year, and a 30% chance the cost will increase by 4% per year over the next 5 years. Calculate the expected value of the present worth at an interest rate of 10% per year.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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2. The cost for manufacturing a component used in intelligent interface converters was $23,000 the first
year. There is a 30% chance the cost will increase by 2% per year, a 40% chance the cost will increase
by 3% per year, and a 30% chance the cost will increase by 4% per year over the next 5 years. Calculate
the expected value of the present worth at an interest rate of 10% per year.
Transcribed Image Text:2. The cost for manufacturing a component used in intelligent interface converters was $23,000 the first year. There is a 30% chance the cost will increase by 2% per year, a 40% chance the cost will increase by 3% per year, and a 30% chance the cost will increase by 4% per year over the next 5 years. Calculate the expected value of the present worth at an interest rate of 10% per year.
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