Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 23

Timken Roller Bearing is a manufacturer of seamless tubes for drill bit collars. The company is planning to add larger capacity robotic arms to one of its assembly lines 3 years from now. If it is done now, the cost of the equipment with installation is $2.4 million. If the company's real MARR is 15% per year, determine the equivalent amount the company can spend 3 years from now in then-current dollars if the inflation rate is 2.8% per year.