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A small metal plating company wants to become involved in electronic commerce. A modest e-commerce package is available for $55.000. Semi-annual updates and site maintenance will cost $800. The salvage value of the package is estimated to be $5,000 after 3 years. If the company wants to recover its total cost in 3 years, what is the equivalent semi-annual amount of new income that must be realized at an interest rate of 5% per 6-month period? O$11,115 per semiannual period O $6.215 per semiannual period O $12,105 per semiannual period O $8.645 per semiannual period

A small metal plating company wants to become involved in electronic commerce. A modest e-commerce package is available for $55.000. Semi-annual updates and site maintenance will cost $800. The salvage value of the package is estimated to be $5,000 after 3 years. If the company wants to recover its total cost in 3 years, what is the equivalent semi-annual amount of new income that must be realized at an interest rate of 5% per 6-month period? O$11,115 per semiannual period O $6.215 per semiannual period O $12,105 per semiannual period O $8.645 per semiannual period

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A small metal plating company wants to become involved in electronic commerce. A modest e-commerce package is available for $55,000. Semi-annual updates and site maintenance will cost $800. The salvage value of the package is estimated to be $5,000 after 3 years. If the company wants to recover its total cost in 3 years, what is the equivalent semi-annual amount of new income that must be realized at an interest rate of 5% per 6-month period? $11,115 per semiannual period O $6.215 per semiannual period O $12,105 per semiannual period O $8,645 per semiannual period O $10,901 per semiannual period A major repair on the suspension system of Jane's 3-year old car will cost her $3,000 every 3 years henceforth (i.e., years 3, 6, and 9) because the warranty expired after 2 years of ownership. Also, she will spend $600 every 2 years (i.e., years 2, 4, 6, 8 and 10) for maintenance now that the warranty is over until she donates the car to charity in year 10. Use these costs to determine Jane's equivalent annual cost for years 1 through 10 at i - 8% per year. O $-1,004 per year O-$1,184 per year O S-1,192 per year OS-1,111 per year O-$1,149 per year
Transcribed Image Text:A small metal plating company wants to become involved in electronic commerce. A modest e-commerce package is available for $55,000. Semi-annual updates and site maintenance will cost $800. The salvage value of the package is estimated to be $5,000 after 3 years. If the company wants to recover its total cost in 3 years, what is the equivalent semi-annual amount of new income that must be realized at an interest rate of 5% per 6-month period? $11,115 per semiannual period O $6.215 per semiannual period O $12,105 per semiannual period O $8,645 per semiannual period O $10,901 per semiannual period A major repair on the suspension system of Jane's 3-year old car will cost her $3,000 every 3 years henceforth (i.e., years 3, 6, and 9) because the warranty expired after 2 years of ownership. Also, she will spend $600 every 2 years (i.e., years 2, 4, 6, 8 and 10) for maintenance now that the warranty is over until she donates the car to charity in year 10. Use these costs to determine Jane's equivalent annual cost for years 1 through 10 at i - 8% per year. O $-1,004 per year O-$1,184 per year O S-1,192 per year OS-1,111 per year O-$1,149 per year
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