3. You are an avid user of ArchimedAl, a large language model-powered generative Alprogram that you use to engineer software for Magnificent Technologies Company.ArchimedAl announces its plan to begin charging a monthly subscription fee of $50per month for its use. Because use of ArchimedAl enables you to be twice asproductive at your job, you consider it to be indispensable to your career, and thatyou will use it indefinitely. The current interest rate is 5%.a. What is the capitalized cost of the use of ArchimedAl?b. If your salary as a software engineer is $250,000, what is the Net PresentValue or Annual Worth of an investment in the use of ArchimedAl assumingan investment horizon of five years? Assume that without it, you would onlybe as productive as a software engineer that makes $125,000 per year.

The objective of the question is to calculate the capitalized cost of using the AI program and the…

Answered: 3. You are an avid user of ArchimedAl,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that before you began your college application process, you were offered a job to work as a floor-trainer at a local fitness center, accompanied by a yearly salary of $27,000 (after taxes). Assume however that you decided to turn down this offer and instead attend a year of college. The total monetary cost of the year of college, including tuition, fees, and room and board expenses, is $43,000. You likely chose to attend college because Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hanger and could rent it out for $5,000 per year. He rents a computer for $1,200, buys office supplies for $500, rents an airplane for $6,000, pays $1,300 for fuel and maintenance, and hires one worker for $30,000. Sam's total revenue from pilot training classes this year equaled $90,400. Sam's explicit costs this year equals:
Question 6 Suppose you are interested in buying a one-year 1,000 dirham bond. You have two options available in the bond market: Option 1 - Emirates Airline bond that pays a coupon rate of 4.75% per year paid annually. Option 2 - Emaar bond that pays a coupon rate of 6.0% per year paid annually. If you decide to buy the Emirates Airline bond, which of the prices below will give you a return approximately equal to the Emaar bond? O a. 956.9 dirhams Ob.973.2 dirhams O. 995.2 dirhams Od. 988.2 dirhams
1.4) You use RM40,000 of your own money to start a catering business. During the first year you earn a 5% return on that investment. If the current interest rate on savings is 8%, you earn an economic profit of Working Calculation:
A firm that owns and manages rental properties is considering buying a building that would cost $800,000 this year, but would yield an annual revenue stream of $50,000 per year for the foreseeable future. For what range of interest rates would this purchase increase the present value of the firm?
Imagine you are the owner of a downtown Laredo building that you lease out for a yearly amount of $ 45,000 over a span of five years. Assume that the explicit expenses for maintaining the building are $ 20,000, and an additional implicit cost of $15,000 exists. All earnings and costs occur at the conclusion of each year. Suppose the interest rate is 7.5 percent, Determine the present value for both the stream of: (i) your accounting profits. Show your steps. (ii) economic profits. Show your steps
Example 2 A new pharmaceutical plant will be built with an initial investment of $1.2 billion which will be an upfront payment. The construction of the plant will take one year after which there will be an expected yearly cashflow of $65 million for 20 years. The discount rate (the rate of return which could be expected if the money were invested elsewhere) is 5.9%. If you are the manager in charge of this project, will you move forward? Show all work.
Tim lives in Vancouver and runs a business that sells pianos. In an average year, he receives $733,000 from selling pianos. Of this sales revenue, he must pay the manufacturer a wholesale cost of $433,000; he also pays wages and utility bills totalling $257,000. He owns his show room; if he chooses to rent it out, he will receive $13,000 in rent per year. Assume that the value of this show room does not depreciate over the year. Also, if Tim does not operate this piano business, he can work as a paralegal, receive an annual salary of $23,000 with no additional monetary costs, and rent out his show room at the $13,000 per year rate. No other costs are incurred in running this piano business.
2. You purchase special equipment that reduces defects by $10,000 per year on an item. This item is sold on contract for the next five years. After the contract expires, the special equipment will save approximately $2,000 per year for five years. You assume that the machine has no market value at the end of ten years. How much can you afford to pay for this equipment now if you require a 20% annual return on your investment?
3
Suppose that your business has an opportunity to buy a machine that produces widgets. The machine can produce 13,500 widgets per year that you can sell for a profit of $1.60 per widget. With proper maintenance, the machine can run indefinitely. You decide that your minimum annual rate of return for any investment is 12 percent. What is the maximum price you would be willing to pay for the machine? Instructions: Round your answer to the nearest dollar. Maximum price =
A developer of high-priced executive tract homes has offered you $1000 per acre for the 500 acres of Vermont countryside you inherited from your Aunt Prudence. The Vermont Land Trust makes a counter offer of $500 per acre for the development rights to the land. By selling off the development rights only, you get to keep title to the land, and can use it for commercial purposes so long as these uses don't involve clearing the land of its forest. You know that you can continue Prudence's maple sugar operations, and you understand that you can probably collect hunting fees annually from private individuals wishing to use your land. How much would you and your heirs in perpetuity have to collect annually as a result of these low impact uses (maple sugaring and hunting) in order for you to agree to sell the development rights to the Vermont Land Trust, assuming that you wish to maximize your revenues from Aunt Prudence's estate, and that your discount rate is 5%? Please format your answer…

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