An annual maintenance cost of a generator is P1000 after two years and it is estimated to increase by 10% each year for the subsequent 7 years. Calculate the total maintenance cost 2 years after the last payment

Q: Maintenance cost for a small bridge expected to last for 60 years is estimated to be Php1,000 each…

A: The yearly cost of owning, operating, and sustaining an asset throughout its entire life is referred…

Q: What is the IRR of an investment that costs $70,500 and pays $27,500 a year for 4 years?

A:

Q: The annual maintenance cost of a generator is P834 after 1 year and it is estimated to increase by…

A: Annual Maintenance Cost = 834 End of period cost structure Increase in annual maintenance costs =…

Q: To provide for the automation of a production process in six years, Invista is starting a sinking…

A: Amount required = $800,000Interest rate = 6.4% compounded monthlyNumber of years = 6To find:…

Q: A building is priced at $250,000. If a down payment of $25,000 is made and a payment of $5000 every…

A: The time value of money (TVM) is a financial concept that recognizes the idea that a sum of money…

Q: Your company agreed to pay a maintenance contractor $ 3.677 as the first payment at the end of the…

A: Annuity refers to series of equalized payments that are either made start or end of definite period…

Q: A house is expected to have a maintenance cost of $1000 the first year. It is believed that the…

A: The annual maintenance cost is an increasing annuity. Here we need to find the equivalent annual…

Q: You anticipate an improvement on your property will require replacement in 9 years. How should rent…

A: Cost of improvement of $45,000 is the present value (PV) of the rent (P) to be increased. Interest…

Q: A company will need $70,000 in 6 years for a new addition. To meet this goal, the company deposits…

A: Amount needed or accumulated amount (FV) = $70,000 Quarterly interest rate (r) = 0.0275 (i.e. 0.11 /…

Q: An apartment property is expected to generate a rental income of $255,000 in year 1 that will grow…

A: Present value = Future value x PVFPVF or Present Value Factor = 1/ (1+i)^twherei = discount rate =…

Q: What must the annual earnings be from a new piece of equipment that costs $10 million and has a…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: A year-end bonus of $26,000 will generate how much money at the beginning of each month for the next…

A: Bonus amount (PV) = $26000 Interest rate = 6.36% Monthly interest rate (r) = 6.36%/12 = 0.53% Number…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.