A High Torque DC Motors manufacturer estimated that the permanent magnet component will cost $95,000 per year over the next 5 years. However, at year 1 the manufacturer spends $55,000 instead of $95,000. How much of a uniform increase each year is the manufacturer expecting for the cost of this part? Assume the company uses an interest rate of 10% per year. Draw the cash flow diagram.
A High Torque DC Motors manufacturer estimated that the permanent magnet component will cost $95,000 per year over the next 5 years. However, at year 1 the manufacturer spends $55,000 instead of $95,000. How much of a uniform increase each year is the manufacturer expecting for the cost of this part? Assume the company uses an interest rate of 10% per year. Draw the cash flow diagram.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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![A High Torque DC Motors manufacturer estimated that the permanent
magnet component will cost $95,000 per year over the next 5 years.
However, at year 1 the manufacturer spends $55,000 instead of
$95,000. How much of a uniform increase each year is the manufacturer
expecting for the cost of this part? Assume the company uses an interest
rate of 10% per year. Draw the cash flow diagram.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0468ba7b-e174-40e0-90ad-731ac641f291%2F53928c6f-badc-4061-a727-50ae9e8ef85c%2Fad3ah4j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A High Torque DC Motors manufacturer estimated that the permanent
magnet component will cost $95,000 per year over the next 5 years.
However, at year 1 the manufacturer spends $55,000 instead of
$95,000. How much of a uniform increase each year is the manufacturer
expecting for the cost of this part? Assume the company uses an interest
rate of 10% per year. Draw the cash flow diagram.
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