Provide only the cash flow diagrams for number 2 and 3, you don’t need to solve it.Once again, there’s no need to solve it and give solutions, PROVIDE ONLY THE CASH FLOW DIAGRAMS FOR NUMBER 2 AND 3. Again number 2 and 3, not just 2, not just 3. Thank you. 2. An electronic device is available that will reducethis year's labor costs by $10,000. The equipment isexpected to last for 8 years. Labor costs increase ata rate of 7% per year and the interest rate is 12%per year.a. What is the maximum amount that we couldjustify spending for the device?b. What is the uniform annual equivalent value (A)of the labor costs over the eight-year period?3. Consider an EOY geometric gradient, which lastsfor eight years, whose initial value at EOY one is$5,000 and f= 6% per year thereafter. Find theequivalent uniform gradient amount over the sameperiod if the initial value of the cash flows at theend of year one is $4,000. Complete the followingquestions to determine the value of the gradientamount, G. The interest rate is 8% per year.

Labor Costs saved annually = 10,000 Life of Equipment = 8 years Rate of interest = 12% Though the…

Answered: 2. An electronic device is available…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Provide only the cash flow diagrams for number 2 and 3, you don’t need to solve it. Once again, there’s no need to solve it and give solutions, PROVIDE ONLY THE CASH FLOW DIAGRAMS FOR NUMBER 2 AND 3. Again number 2 and 3, not just 2, not just 3. Thank you.

2. An electronic device is available that will reduce
this year's labor costs by $10,000. The equipment is
expected to last for 8 years. Labor costs increase at
a rate of 7% per year and the interest rate is 12%
per year.
a. What is the maximum amount that we could
justify spending for the device?
b. What is the uniform annual equivalent value (A)
of the labor costs over the eight-year period?
3. Consider an EOY geometric gradient, which lasts
for eight years, whose initial value at EOY one is
$5,000 and f= 6% per year thereafter. Find the
equivalent uniform gradient amount over the same
period if the initial value of the cash flows at the
end of year one is $4,000. Complete the following
questions to determine the value of the gradient
amount, G. The interest rate is 8% per year.

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