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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.

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
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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
Transcribed Image Text: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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