If over the next 12 years, you project annual savings of about $40,000 from having an automated system, what is the maximum price you would be willing to pay today for an installed, automated golf course sprinkler system? (Assume a interest rate of 6% and you may ignore income taxes)
A. Redo the calculation using a 10-year time period and $48,000 in annual savings.
B. Redo the inital calculation one more time using $50,000 in annual savings for the first six years and $30,000 in annual savings for the next six years.