Question

Metalfab Pump and Filter expects the cost of steel bodies for 6-inch valves to increase by $1.5 every 3 months. If the cost for the first quarter is expected to be $80, what is the present worth of the costs for a 3-year time period at an MARR of 7% per year compounded quarterly?

Answer 1

120

Explanation:

n= 5*4= 20

Final cost= 80*(2*20)= 120

Now, we can calculate the present value:

PV= FV/(1+i)^n

PV= 120/ (1.011^20)= $96.42