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An agricultural machine purchased for $ 8000 is expected to be sold for a scrap value of $ 1300 at the end of the 6th year. It is estimated that the running costs of the machine will increase by 1700 dollars in the first year and by 11% every year in the other years. Find the equivalent present value of the machine in question at an annual interest rate of 8%.
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- You are interested in purchasing a bond from Swiss international. The bond had a 20 year maturity when it was issued, which was 3 years ago. Its face value was $1,000. The bond pays quarter interest at an 0.12 coupon rate. The bond currently trades at a price of $700, what is the YTMA college has been willed $100,000 to establish a permanent scholarship. If funds are invested at 6% and all funds earned are disbursed yearly, what will be the value of the scholarship in the sixth year of operation?It is estimated that a certain piece of equipment can save $22,000 per year in labor and materials costs. The equipment has an expected life of five years and no market value. If the company must earn a 5% annual return on such investments, how much could be justified now for the purchase of this piece equipment?
- The present price (year 0) of kerosene is $4.30per gallon, and its cost is expected to increase by 10%per year. (At the end of year 1, kerosene will cost$4.73 per gallon.) Mr. Garcia uses about 800 gallons of kerosene for space heating during a winterseason. He has an opportunity to buy a storage tankfor $600, and at the end of four years, he can sell thestorage tank for $100. The tank has a capacity to supply four years of Mr. Garcia’s heating needs. So, hecan buy four years’ worth of kerosene at its presentprice ($4.30), or he can invest his money elsewhereat 6% interest. Should he purchase the storage tank?Assume that kerosene purchased on a pay-as-you-gobasis is paid for at the end of the year. (However,kerosene purchased for the storage tank is purchasednow.)A company is developing a new electronic product. It expects to spend $38 million on Research and Development and then another $6 million on Manufacturing Engineering. After completing all this, the company expects a cost of $15 per unit to manufacture and plans to build in a profit of $5 per unit into the price. The company needs to recover the cost of R&D plus Manufacturing Engineering over five years through sales of 4 million units over those five years. What will the company need to establish as the sales price for the unit?The present price (year 0) of kerosene is $4.30 per gallon, and its cost is expected to increase by 10% per year. (At the end of year 1, kerosene will cost $4.73 per gallon.) Mr. Garcia uses about 800 gallons of kerosene for space heating during a winter season. He has an opportunity to buy a storage tank for $600, and at the end of four years, he can sell the storage tank for $100. The tank has a capacity to supply four years of Mr. Garcia's heating needs. So, he can buy four years' worth of kerosene at its present price ($4.30), or he can invest his money elsewhere at 6% interest. Should he purchase the storage tank? Assume that kerosene purchased on a pay-as-you-go basis is paid for at the end of the year. (However, kerosene purchased for the storage tank is purchased now.)
- A company plans to invest $15,000 dollars on new equipment with an 8 year life to reduce operating costs. It is estimated that the savings will be $5,000 the first year but decrease by $200 each year for the remainder of the equipment's life. Determine the net present worth (NPW) of the equipment at 7% interest. Express your answer in $ to the nearest $10.The manager of Automated Products is contemplating the purchase of a new machine that will cost$300,000 and has a useful life of five years. The machine will yield (year-end) cost reductions toAutomated Products of $50,000 in year 1, $60,000 in year 2, $75,000 in year 3, and $90,000 in years4 and 5. What is the present value of the cost savings of the machine if the interest rate is 8 percent?suppose that we have cash flows as follows: End of Year Cash Flows($) 1 8,000 2 7,000 3. 6,000 5,000 Calculate the annual equivalent value at the end of each year at i=13% per year?
- Question 1 Calculate the equivalent annuity (A) for the 6-year cash-low shown below assuming an interest rate of 10%. $10,000 $20,000 $20,000 $20,000 $20,000 $20,000A machine has a first cost of $180,000. Its service life is 10 years when it can be sold for$30,000. Annual maintenance costs are $3,500. At years 4 and 8, it will require major servicing at a cost of $20,000 each. What is the equivalent annual cost of owning and operating this machine, assuming that the rate is 15%?The maintenance on a machine is expected to be P6322 for the second year and an additional 1,750 cost every year until year 5. What is the present equivalent value at the beginning of the first year if the interest is 5% per year? Round your answer to 2 decimal places. Add your answer