A company is considering buying a CNC machine. In today's dollars, it is estimated that the maintenance costs for the machine (paid at the end of each year) will be $25,000, $27,000, $28,000, $31,000, and $33,000 for years 1 to 5, respectively. The general inflation rate (F) is estimated to be 3% per year, and the company will receive 17% return (interest) per year on its invested funds during the inflationary period. The company wants to pay for maintenance expenses in equivalent equal payments (in actual dollars) at the end of each of the five years. Find the amount of the company's payments. The amount of the company's payments is $ thousand. (Round to the nearest thousand.)

A company is considering buying a CNC machine. In today's dollars, it is estimated that the maintenance costs for the machine (paid at the end of each year) will be $25,000, $27,000, $28,000, $31,000, and $33,000 for years 1 to 5, respectively. The general inflation rate (F) is estimated to be 3% per year, and the company will receive 17% return (interest) per year on its invested funds during the inflationary period. The company wants to pay for maintenance expenses in equivalent equal payments (in actual dollars) at the end of each of the five years. Find the amount of the company's payments. The amount of the company's payments is $ thousand. (Round to the nearest thousand.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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