Teduie company bought a new model of motor for its electric power generating plant in 2017. Theuseful life of the motor was 5 years and the investment was $30,000 in 2017's dollars. The followingtable shows the savings obtained through the project in actual dollars and the consumer price indexnumbers for the time period between 2017 and 2022:PriceEnd of YearSavingsIndex20172502018$10,000250$12,100$14,641$19,326.1$23,384.620192752020302.520213632022399.3If the inflation-free interest rate is 15%, determine whether the investment was worthwhile.

Teduie company bought a new model of motor for its electric power generating plant in 2017. The useful life of the motor was 5 years and the investment was $30,000 in 2017's dollars. The following able shows the savings obtained through the project in actual dollars and the consumer price index humbers for the time period between 2017 and 2022: Price End of Year Savings Index 2017 250 $10,000 $12,100 $14,641 $19,326.1 $23,384.6 2018 250 2019 275 2020 302.5 2021 363 2022 399.3

Teduie company bought a new model of motor for its electric power generating plant in 2017. The useful life of the motor was 5 years and the investment was $30,000 in 2017's dollars. The following able shows the savings obtained through the project in actual dollars and the consumer price index humbers for the time period between 2017 and 2022: Price End of Year Savings Index 2017 250 $10,000 $12,100 $14,641 $19,326.1 $23,384.6 2018 250 2019 275 2020 302.5 2021 363 2022 399.3

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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