Wrangler Western has some of its jeans stonewashed under a contract with an independent contractor, Almos Garment Corp. If Almos’ operating cost is $22,000 per year for years 1 and 2 and then it increases by 8% per year through year 10, what is the year-zero present worth of the machine operating cost at an interest rate of 10% per year?

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A: Ans Solution

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Q: What is the present worth of $30,000 in year 8 at an interest rate of 10% per year?

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Q: Wrangler Western has some of its jeans stone-washed under a contract with an independent contractor,…

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A: Present worth of saving can be calculated as follows: