New equipment installed at your plant has drastically improved the production process over the last six months. The amount of scrap reduction over a period of six months in dollars is shown in the table below. Month Savings
1 $10,000
2 $12,000
3 $14,000
4 $16,000
5 $18,000
6 $20,000
What is the present worth (P) of the savings over the six-month period? To receive full credit, you must use an arithmetic gradient. Assume that interest is 9% per year, compounded monthly. Construct cash flow diagrams and show all your work.