Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 37

Costs associated with the manufacture of miniature high-sensitivity piezoresistive pressure transducers are $73,000 per year. A clever industrial engineer found that by spending $16,000 now to reconfigure the production line and reprogram two of the robotic arms, the cost will go down to $58,000 next year and $52,000 in years 2 through 5. Using an interest rate of 10% per year, determine
a) the equivalent annual cost of the manufacturing operations and b) the equivalent annual savings in years 1 through 5.