a. The city council has approved the building of a new bridge over Running Water Creek. The bridge will cost $17,000 for initial construction and have an annual maintenance cost of $1,000. The council plans to withdraw money from the city's Bridges & Highways account to open a special account to cover the initial construction and to fund a perpetuity to cover the maintenance costs forever. How much money must be withdrawn from the Bridges & Highways account if the city can expect to earn 6% on the special account? (a) $27,000 (b) $34,000 $37,000 $42,000

a. The city council has approved the building of a new bridge over Running Water Creek. The bridge will cost $17,000 for initial construction and have an annual maintenance cost of $1,000. The council plans to withdraw money from the city's Bridges & Highways account to open a special account to cover the initial construction and to fund a perpetuity to cover the maintenance costs forever. How much money must be withdrawn from the Bridges & Highways account if the city can expect to earn 6% on the special account? (a) $27,000 (b) $34,000 $37,000 $42,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: A rental company spent $2500 on a new air compressor 7 years ago. The annual rental income from the…

A: This question pertains to capital budgeting/ investment appraisal within the field of economics.A…

Q: Patti's project has an IRR of 15 percent, first cost P, and annual savings A. She observed that the…

A: Given, First cost : P Annual Savings : A Salvage Value : Third of the First Cost =P/3 IRR : i = 15%…

Q: Equal end of year payments of $263.80 each are being made on a $1,000 loan at 15% per year…

A: Given: Yearly payments (PMT) = $263.80 Loan amount (PV) = $1000 Number of payments = ? Interest rate…

Q: What method is used to translate a project's cash flow into equivalent net from present value?

A: To calculate a project's net present value (NPV), the project's required rate of return is used to…

Q: Your company wants to buy a new piece of machinery for $2.3 million. You will pay for 15% of the…

A: The weighted average cost of capital (WACC) of a company is the average cost of capital from all…

Q: For the following cash flows, using Excel, compute: a) the present worth. b) the equivalent uniform…

A: Thank you for the question. As per Bartleby's guidelines, we will solve 1 question per session. To…

Q: You begin work on June 1 and work until August 31, and receive pay on the last day of the month.…

A: DISCLAIMER “Since you have asked multiple questions, we will solve the first three questions for…

Q: You deposit $1,000 in a bank account that pays a fixed interest rate of 5% per year and it compounds…

A: Given Present value P=$1000 Rate of interest =5% per year compounded annually We need to find the…

Q: 1. How much would be in your account in 10 years after depositing $2000 now? The annual interest…

A: All the Answers are given below.

Q: Stan Slickum has a used car that can be bought for $8,700 cash or for a $2,000 down payment and $780…

A: Given the price = 8700 Down payment = 2000 Effective price = 8700 - 2000 = 6700

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: A bond is a fixed-income investment that represents a loan made by an investor to a borrower,…

Q: Please answer is a step by step

A: Calculating the Loan Details for a $4300 Loan with a 13% Interest RateStep 1: Calculate the Total…

Q: You deposit $600 today in a savings account that earns 4.75% compounded quarterly and leave the…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: Draw a cash flow diagram for someone who gets subsidized student loans their senior year: Receive…

A: Cash flow:The internet amount of cash or coins equivalents that enters and exits a business or…

Q: Problem 1 An interest rate equal to 7% compounded annually: (a) If $20,000 is borrowed for 5 years…

A: Problem 1 (a) Given, Rate of interest (r)= 7% compounded annually = 0.07 Money borrowed (P)=…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: Step 1: Preparation of journal entries.DateAccount titles and explanationsDebitCreditJan-01Cash…

Q: QUESTION 3 Rajesh would like to buy his first car and the one he has his eye on is $25,000, plus an…

A: A loan is a sum of money that one or more individuals, businesses, or other organisations acquire…

Q: 1. Charlie Chaplin borrowed P100,000.00 on October 31, 2019 from Mr. Beans and the loan has an…

A: According to the question, it is given that : Principal = P 100,000 Rate of Interest = 6% Time…

Q: 5. Create an amortization table for the first year of a mortgage valued at $250000 with an interest…

A: Amortization in economics refers to the gradual reduction of a debt or liability over time through…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

1. Mary buys a 20 year annuity immediate for $100,000 subject to 6% effective annual interest rate. The first payment is one year from the time of purchase. Mary reinvests each of the 20 payments, as soon as she received them at the end of each year, into a fund that earns 8% interest on deposits. What is the accumulated amount in Mary's fund right after the 20th annuity payment has been deposited into the fund?
UPVOTE WILL BE GIVEN. PLEASE WRITE THE COMPLETE SOLUTIONS. BOX THE FINAL ANSWER. MANUAL COMPUTATION.
1. An electric utility investment has a capital cost of S60 million, a term of 8 years, and an annuity of $16 million. What is the CRF for this investment?
2.The simple interest on a $6500 loan at 15% for 9 months is. a)$731.25 b)$7312.50 c)$73.13 d)$2925
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
You decide to purchase a tractor for a net cost of $350,000. You finance thistractor for 5 years at 5.0% interest. You make one payment per year using equalprincipal payments. Calculate your annual payments and amortization (payoffschedule). Is the total cost of this loan more or less than if you had used the equaltotal payments formula? Explain.
9. The Public Service Board (PSB) awarded two contracts worth a combined $1.07 million to improve (i.e., deepen) a retention basin and reconstruct the spillway that was severely damaged in a flood 2 years ago. The PSB said that, because of the weak economy, the bids came in $950,000 lower than engineers expected. If the projects are assumed to have a 20-year life, what is the annual worth of the savings at an interest rate of 6% per year?
PLEASE ANSWER ASAP AND NEAT ONLY IF 100% CORRECT!
1. In March of year one, Darcie sold land for $500,000. Her basis was $340,000. Accepting a down payment of $90,000, she took back an installment note of $410,000. She agreed to ten payments of $41,000 each, with the first one three months after the escrow closes and subsequent payments due on June 15th of each year until paid. Darcie collected the first four payments before she died. Her executor collected one payment before distributing the note to the three children, Arnold, Bobbie, and Charles, as tenants in common. They collected the final five payments. a. What is the note's gain recognition percentage and the note's basis percentage? b. Construct a table that shows by year (rows) the following (columns): recipient, principal received, gain recognized, note balance (after the payment), basis in the note. c. State how much gain was recognized by Darcie, by the estate, and by each of her three children. Does the total gain recognized square with the $160,000 that should be…
SUBJECT: ENGINEERING ECONOMICS By condition of a will, the sum of P 2,000 is left to a girl to be held in trust fund by her guardian until it amounts to P 50,000. When will the girl received the money if the fund is invested at 8% compounded quarterly? When will the amount be tripled with an interest of 11.56%? A man borrowed P 1,000,000 at interest rate of 12% per annum compounded quarterly. What is the effective rate?
3. Jennifer Creek is saving up for a new car. She wants to finance no more than $10,000 of the $26,000 estimated price in two years. She deposits $4000 into a savings account now and will make monthly deposits for the next two years. If the savings account pays a nominal interest rate of 5% per year with monthly compounding, how much must she deposit each month?