Answer Happy

- taxation t = 0.01,(b) interest rate i = 0.08, inflation e = 0.04, taxation t = 0.02. Assume that interest, inflation, and taxation occur during the same period at constant rates. a 15-23 Company A installs a cogeneration system in its facility, which costs $50,000 including labor. Calculations indicate that this system will save $4000/yr from the energy it saves for a period of 15 yr. The salvage value of the equipment at the 5 end of the 15-yr period is $5000. Company B takes a different route and invests $50,000 in a savings account. Taking the inflation-taxation-adjusted interest rate for both applications to be 4 percent, determine which company will have more money after 15 yr. Assume that the annual savings from using the cogeneration system is also deposited in the same bank.