Please provide COMPLETE and CLEAR SOLUTION.7. A company expects to retire an existing machine at the end of 2024 and will replace it with a new machinefor the same task at an estimated cost of P60.001. The old machine is expected to be sold for P5,000 whenit is replaced. To provide for the replacement, the company intends to deposit the following anmounts in anaccount earning interest at 8% compounded quarterly:P20,000 at the end of 2021P15,000 at the end of 2022P10,000 at the end of 2023What additional amount is needed at the end of 2024 to purchase the new machine? Draw the CFD.

Amount invested in 2021 = P20000 Amount invested in 2022 = P15000 Amount invested in 2023 = P10000…

Answered: 7. A company expects to retire an…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

You are considering purchasing a dump truck. The truck will cost $70,000 and have operating and maintenance costs that start at $15,000 the first year and increases by $1,900 per year. Assume that the salvage value at the end of five years is $20,000 and interest rate is 12%. What is the equivalent annual cost of owning and operating the truck for five years? Click the icon to view the interest factors for discrete compounding when i= 12% per year. The equivalent annual cost of owning and operating the truck is $ (Round to the nearest dollar.)
The nominal interest rate is 14% compounded semiannually. What amount will need to be deposited every six months to be able to have enough money to pay three annuity payments of $10,000 for three years beginning at the end of year seven? The deposits begin now and continue every six months until six deposits have been made. The amount to be deposited every six months is ___.
If $4,000 is borrowed today and $8,955 is paid back in 10 years, what interest rate compounded annually has been earned? % Round entry to one decimal place. Tolerance is ±0.2.
John is a very cost-conscious investor. His rule of thumb is that it costs $200 per year, starting in the first year of vehicle life to maintain an automobile. This expense increases by $200 each year over the life of the car. John is now considering the purchase of a four-year old car with 40,000 miles on it for $7,000. How much money will John have to set aside now to pay for maintenance (as a lump sum) if he keeps this car for eight years? John's interest rate is 4% per year. Click the icon to view the interest and annuity table for discrete compounding when i= 4% per year. John will have to set aside $ to pay for maintenance. (Round to the nearest dollar.)
The nominal interest rate is 10% compounded semiannually. What amount will need to be deposited every six months to be able to have enough money to pay three annuity payments of $10,000 for three years beginning at the end of year seven? The deposits begin now and continue every six months until six deposits have been made. The amount to be deposited every six months is ___.
Suppose that on September 30, 2021, a person opened an investment account with an initial deposit of $20,000. The account guarantees to pay interest at a nominal annual rate of 6%, compounded monthly. The person plans to deposit $3,000 into the account at the end of each and every month starting on October 31, 2021 and ending on March 31, 2024 (a total of 30 additional deposits). (a) How much money will be in the account after the 30th additional deposit is made? (b) What is the total amount of interest that will be earned over the 30-month planning horizon? (c) What is the effective annual interest rate that will be earned? Express your answer to the nearest tenth of a percent, i.e., in the form xx.x%.

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