A mechanical consulting company is examining its cash flow requirements for the next 10 years. The company expects to replace office machines and computer equipment at various times over the 10-year planning period. Specifically, the company expects to spend $5000 2 years from now, $5000 6 years from now, and $7000 8 years from now. At an interest rate of 13% per year, determine: a) The present worth of the planned expenditure for only the $5000 in year 2 is $ Leave your answer as a positive value and to the nearest $100 dollar. b) The net present worth of all planned expenditures is $ Leave your answer as a positive value and to the nearest $100 dollar.

A mechanical consulting company is examining its cash flow requirements for the next 10 years. The company expects to replace office machines and computer equipment at various times over the 10-year planning period. Specifically, the company expects to spend $5000 2 years from now, $5000 6 years from now, and $7000 8 years from now. At an interest rate of 13% per year, determine: a) The present worth of the planned expenditure for only the $5000 in year 2 is $ Leave your answer as a positive value and to the nearest $100 dollar. b) The net present worth of all planned expenditures is $ Leave your answer as a positive value and to the nearest $100 dollar.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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