A small company purchased now for $23,000 will lose $1,200 each year for the first 4 years. An additional $8,000invested in the company during the fourth year will result in a profit of $5,500 each year from the fifth to the fifteenthyear. At the end of 15 years, the company can be sold for $33,000.a. Determine the IRRb. Calculate the FW if MARR = 12%c. Calculate the ERR when € = 12%.

a) PW(i%) = -23,000-1,200 (P/A, i%, 4) - 8,000 (P/F, i%, 4) + 5,500 (P/A, i%, 11)(P/F, i%, 4) +…

Answered: A small company purchased now for…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Based on the following cash flows (t=0 to t=4), calculate the approximate-ERR. Assume the MARR is at 10%. ооо t=0, disbursement of 50,000. t=1, receipt of 20,000. t=2, receipt of 25,000. t=3, receipt of 28,000. t=4, disbursement of 20,000. 8.1056% 7.8590% 6.5535% 4.2040% 3.2525%
3.1) A company purchases a new printing press and determines the following cash items: Initial cost = R500 000 Annual revenue = R100 000 Annual maintenance = R50 000 Printing drum overhaul in year 4 = R100 000 Salvage value at the end of year 5 = R80 000 3.1.1) Sketch the cash flow diagram. 3.1.2) Determine the cash flow for end of year 3. 3.1.3) Determine in which year/s will a negative cash flow be experienced.
Find the present worth of the following infinite cash flows, using i = 8%/year. Year Cash flows at the end of each year 1 0 2 0 3 0 4 $500 5 $1100 6 $500 7 $1100 8 $500 9 $1100 : :
D Question 1 Consider a project that has an initial investment of $100,000 and that returns $36,000 per year for the next 5 years. If the MARR is 12%, is this a good investment? Use interest factor to evaluate the project based on PW. Since PW - $4,671.40 is positive, this is a good investment. Since PW-$29,744.80 is positive, this is a good investment. A revenue of $36,000 per year for five years is not acceptable. This is not a good investment. O Since PW-$56,889 indicates a loss, this investment is not good.
The cash flow diagram is independent on the point of view. true or false?
The price of a new car is $20,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 7%/ year compounded monthly. (Round your answers to the nearest cent.) (a) What monthly payment will she be required to make if the car is financed over a period of 36 months? Over a period of 60 months? 36 months S 60 months S (b) What will the interest charges be if she elects the 36-month plan? The 60-month plan? 36-month plan $ 60-month plan S
Economics
(30 points) The following cash flow diagram indicates the monthly payments you will have in the future. Assume that the interest rate is 12% per year. $3.200 $2.800 $2,400 $2,000 16 17 18 19 20 21 a) (15 points) What annual amount should you save for the first 12 months to complete the following payments starting from 18th month, if you expect your parents to also deposit into your account $1000 at the beginning of month 2? b) (15 points) Explain how your answers to (a) will change if the interest rate increases. Write your comments in your words.
A civil engineer planning for her retirement places 10% of her salary each year into a high-technology stock fund. If her salary this year (end of year 1) is $170,000 and she expects her salary to increase by 2% each year, what will be the future worth of her retirement fund after 13 years provided it earns 6% per year? The future worth of her retirement fund will be $_____?
Choose the best answer and provide a solution. Determine the accumulated amounts after 5 years of P1,000.00 invested at the rate of 10% compounded DAILY A. 1,628.90 B.1,645.31 C.1,648.61 D.1,610.51
A company is considering two machines. Machine X has a first cost of $30,000, AOC of $18.000, and 5 of $7000 after 4 years. Mact will cost $50,000 with an AOC of $16,000 and 5 of $9000 after 6 years. The AW equations for Machine X and Y at 12% interest rate Select one: O a AWX=-30,000(A/P12 % .4) -18,000 7,000(A/F.12%.4); AWY- 50,000(A/P12 %6) -16.000 9.000(A/F.12%,6) O b. AWX=-30,000(A/P12%24) -18,000 7,000(A/F.12%24) AWY- -50,000(A/P12%24)-16.000 9.000(A/F12%24) Oc AWX=-30.000(A/P12 % 6 ) -18,000 7,000(A/F.12%6) AWY 50.000(A/P12% 6)-16.000 9,000(A/F.12%,6) Od AWX-30,000(A/P12% 12)-18.000 7.000(A/F.12% 121 AWY- 50.000(A/P12% 12)-16,000 9,000(A/F.12%,12) .

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