QUESTION 1

A new production system for a factory is to be purchased and installed for $120,887. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per

kWh, and factory MARR is 15% per year, and the salvage value of the system will be $9,018 at year 6. Using the AW method to analyzes if this investment is economically justified

A- calculate the AW of the above investment and insert the result below.