2. A water resources project has benefits that equal $40,000 at the end of the first year and increase on a uniform gradient series to $200,000 at the end of the fifth year. The benefits remain constant at $200,000 each year until the end of year 30, after which they decrease to $0 on a uniform gradient at the end of year 40. What is the present value of these benefits using a 6-percent interest rate?

2. A water resources project has benefits that equal $40,000 at the end of the first year and increase on a uniform gradient series to $200,000 at the end of the fifth year. The benefits remain constant at $200,000 each year until the end of year 30, after which they decrease to $0 on a uniform gradient at the end of year 40. What is the present value of these benefits using a 6-percent interest rate?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Essentials Final x + s/Microeconomic%20Essentials%20Final%200SA.pdf W 8 / 18 90% + QUESTION 12 Consider the following scenario: Q (4 Marks) Steven owns his own auto repair shop. He uses his own premises as a workshop. If he had rented his premises to someone else, he would have received R18 000 in rent. He initially invested R50 000 in his business to buy tools and machines. If he had invested the money, he could have earned 10% per year on the money, which is R5 000 per year. If he did not work for himself, he could have earned a salary of R60 000. His expenditure for the year consisted of the following: Oil, petrol, sparkplugs, fan belts and other materials: R70 000 Salary for two junior mechanics: R35 000 Admin costs: R15 000 Assume that the total revenue of the auto shop is R230 000. Calculate Steve's economic profit. a) R203 000 b) R110 000 c) R27 000 d) R32 000 DOLL 11 ENG 2024/0
Phyllis invested 50000 dollars, a portion earning a simple interest rate of 4 percent per year and the rest earning a rate of 7 percent per year. After one year the total interest earned on these investments was 2900 dollars. How much money did she invest at each rate? At rate 4 percent : At rate 7 percent :
6
Please show work
2
Microsoft has the opportunity to purchase a new factory today that will provide them with a $50 million return four years from now. If prevailing interest rates are 6 percent, what is the maximum that the project can cost for Microsoft to be willing to undertake the project? a. $53,406,002 b. $39,604,682 c. $43,456,838 d. $50,000,000 e. $34,583,902 D D
$500 0 1 P = ? 2 3 i = 10% Compute the present value, Po = ? $500 4 5
2. A group of investors is planning to build an athletic equipment and apparel store in Saskatoon, close to a group of existing big box stores. The group spends $800,000 to buy the required land and to develop the parking lot. After completing these steps they terminate the project when they learn that another athletic store is going to be built close by. What option have the investors exercised? Three years later, the investors still own the land and improvements. How should they value these things if they decide at that time to complete the store as originally planned?
Hurry!!!
11:52 Investment Appraisal (Year 2 Column 2... 9% 5. Which of the following investments would you choose based on payback? Project 3 years 6 months 5 years 10 months C A В 2 years 8 months Project A Project B Project C 6. Discount Factor (5%) Year 0 -450,000 150,000 1.00 Year 1 0.952 Year 2 180,000 0.907 Year 3 250,000 0.864 Year 4 200,000 200,000 0.823 Year 5 0.784 ... Activity Chat Teams Assignments More
6.Barney's Liquids and Aunt Bee's Lemonade plan to expand their international partnership for the marketing and distribution of ready-to-drink tea products by adding 11 countries to their current markets. If the agreement is reached, operations are expected to begin 2 years from now. The snack and beverage company forecasts that the agreement will bring additional revenue of $80 million for the next 7 years. (i.e.,start from the end of year 3), What is the present value now (t =0) of the total revenue if the interest rate of 10% per year?
Assume that at the end of year 0 you invested $100,000 in an investment fund. Since then the annual returns earned by this fund have been as follows: End of Year 1 2 3 Observed Return A. $87,319. B. $90,973. C. $109,683. D. $114,015. 15.00% -40.00% 35.00% It is now the end of year 3 and you expect to earn the same average annual return that you earned over the three-year period above. Based on this expectation, the value of your original $100,000 investment at the end of year 4 will be closest to: