1- How much can you afford to spend now on an Alarm Fire system if it will save you $21,300 per year for the next 5 years? Use aninterest rate of 10% per year.2. You need to buy a car in two years from now, the car dealer made you an offering, if you buy the car now, he would give you 40%a discount rate. You know that the car price will be SR 142,000 if you delay the purchasing decision two years. what is the presentworth of the savings? if you refuse the offering. Assume the interest rate is 10% per year.3. The amount of money that Energy Company can spend now for improving productivity instead of spending $30,000 three yearsfrom now at an interest rate of 12% per year is closest to:(a) $15,700(b) $17,800(c) $19,300(d) $21,350

The value that depicts the expected stream of income that is being determined on the date of…

Answered: 1- How much can you afford to spend now…

1- How much can you afford to spend now on an Alarm Fire system if it will save you $21,300 per year for the next 5 years? Use an interest rate of 10% per year.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1- How much can you afford to spend now on an Alarm Fire system if it will save you $21,300 per year for the next 5 years? Use an
interest rate of 10% per year.
2. You need to buy a car in two years from now, the car dealer made you an offering, if you buy the car now, he would give you 40%
a discount rate. You know that the car price will be SR 142,000 if you delay the purchasing decision two years. what is the present
worth of the savings? if you refuse the offering. Assume the interest rate is 10% per year.
3. The amount of money that Energy Company can spend now for improving productivity instead of spending $30,000 three years
from now at an interest rate of 12% per year is closest to:
(a) $15,700
(b) $17,800
(c) $19,300
(d) $21,350

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