The overhead costs in a highly automated factory are expecte…

The overhead costs in a highly automated factory are expected to increase at an annual compound rate of 9.0% for the next 7 years. The overhead cost at the end of the first year is $180,000. What is the annual worth of the overhead costs for the 7-year period? The time value of money rate is 9%/year.

Mayberry, Inc., is considering a design change that will cos…

Mayberry, Inc., is considering a design change that will cost $6,000 and will result in an annual savings of $1,000 per year for the 6-year life of the project. A cost of $2,000 will be avoided at the end of the project as a result of the change. MARR is 8%/year. What is the annual worth of this investment? Should Mayberry implement the design change? Why or why not? Type your answers below.