Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 18

Carlsbad Gas and Electric is planning to purchase a degassing tower for removing CO 2 from acidified saltwater. The supplier quoted a price of $125,000 if the unit is purchased within the next 3 years. Your supervisor has asked you to calculate the present worth of the tower when considering inflation. Assuming the tower will not be purchased for 3 years, calculate the present worth at an interest rate of 10% per year and an inflation rate of 4% per year.