1. Cummins Crane Corporation (3C) is considering replacing its

controllers on its heavy lift cranes with new portable infrared

controllers. 3C expects to achieve cost savings of $15K the

second year, increasing by $1500 each year thereafter for the

next 4 years.

» Draw the Cash Flow Diagram (10 points)

b. At an interest rate of 12% per year, what is the equivalent

annual worth of the savings? (40 points)