Energy costs for a green chemical treatment have been increasing uniformly for 5 years. If the cost in year 1 was $26,000 and it increased by $2000 per year through year 5, Find the present worth of the costs at an interest rate of 10% per year.

Energy costs for a green chemical treatment have been increasing uniformly for 5 years. If the cost in year 1 was $26,000 and it increased by $2000 per year through year 5, Find the present worth of the costs at an interest rate of 10% per year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A new project related to high-end machinery is capable of returning 8% p.a on the investment. A…

A: Rate is 8% Investment amount is $15,000 Growth rate of investment amount is 3% Salary amount is…

Q: Carson, Inc. invests in cost saving technology. Based on the data below, the annual cost savings…

A: The gain achieved from activities that lower an organization's overall spending on assets that…

Q: Altmax Ltd, a company that manufactures automobile wiring harnesses, has budgeted P = $400,000 now…

A: Time value of money means that worth of a rupee today is less than the worth of rupee in future.…

Q: An energy-efficient motor may be purchased for $3,000 that will last for 5 years. It will save $800…

A: Present Worth: It is the notion of "present value" that asserts that a sum of money is worth more…

Q: A machine costing $32,000 to buy and $5,000 per year to operate will mainly save labor expenses in…

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

Q: The prospective maintenance expenses for a commercial heating, ventilating, and air-conditioning…

A: In column 2 , the annual maintenance expenses is given in dollars. The general price inflation…

Q: Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to…

A: Present worth The present value method refers to calculating the present value of future cash. The…

Q: A.9. The cost of heavy construction dredging equipment is rising at the rate of 6 percent com-…

A: The price of the equipment in the fifth year: The price of the dredging equipment is increasing…

Q: Company x uses machines to manufacture x. One machine costs $142,000 and lasts about 5 years before…

A: Cost of one machine=$142000Operating cost=$7000Economic life=5yearsDiscount rate=r=11%Find out…

Q: The pumping cost for delivering water from the Ohio River to Wheeling Steel for cooling hot rolled…

A: Computation:

Q: 3. A homeowner may upgrade a furnace that runs on fuel oil to a natural gas unit. The investment…

A: The process that analyzes and evaluates any investment/project's feasibility and profitability is…

Q: A young engineer is considering to built a 25unit apartment near a commercial center. Because of the…

A: Net Present Value method is used to determine whether the proposal should be selected or rejected…

Q: The textile factory is being upgraded. The expectation is that labor costs will decrease at an…

A: The time value of money implies that the real value of money is no equal at different point of time…

Q: The pumping cost for delivering water from the Ohio River to Wheeling Steel for cooling hot rolled…

A: Given: Cost for First 4 years = $1.8 million Cost for 5th year = $1.77 million Cost for 6th year =…

Q: A transit system is estimated to cost $2,000,000 with operating and maintenance costs starting…

A: Capital Budgeting: It is the planning process used to determine whether an organization invests for…

Q: An investment company wants to study the usage of new technology for one of its clients. This…

A: Human Hour Per month = 187 Average Savings per Human hour = $450 Average savings per month =…

Q: A new transmission in your truck will cost $5,000. Luckily, it should reduce maintenance expense by…

A: Profitability Index is a financial tool which tells whether an investment should be accepted or…

Q: You are considering a manufacturing equipment that has a cost of $100,000. The equipment is expected…

A: Equivalent Savings per hour refers to amount of saving adjusted with time value factor is saved by…

Q: An energy management system that can save $8,040 per year for four (4) years, expenses are $2,000…

A: When a project has a positive rate of return, profitability is anticipated. In judging a project's…

Q: Five years ago your company purchased some equipment for $125,000. The annual costs for operating…

A: The question is based on the concept of calculation of annual worth of the machine AW= Purchase…

Q: A young engineer is considering to built a 1 unit apartment near a commercial center. Because of the…

A: The present value technique would be good for the analysis of an investment. The investment with…

Q: An energy conservation option with a first cost of $10,000 is installed. It requires $600 per year…

A: Life cycle costing is the calculation of the total amount which an entity will spend throughout the…

Q: A new punching machine will cost $4,593. At the end of its 10 years useful life, the machine can be…

A: NPV is also known as Net present value. It is a capital budgeting techniques which help in decision…

Q: what would have been the maximum amount that should be invested? Use interest rate of 9% compounded…

A: A stream of equal cash flows (CF) paid or received periodically is termed as annuity. Ordinary…

Q: The pumping cost for delivering water from the Ohio River to Wheeling Steel for cooling hot rolled…

A: Present worth is present value of all future cash flows. Present value is calculates by using…

Q: Show in excel format how to solve the following - Westland Manufacturing spends $20,000 to update…

A: Cost = $20,000Annual savings = $4,000Cost of funds = 8%Number of years = 10 years

Q: The average annual electricity consumption for a single-family house is 5000 kWh with the cost per…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: A new process for a manufacturing process will have a first cost of $45,000 with annual costs of…

A: Discounted payback period is an important capital budgeting tool. Here we firstly discount all the…

Q: A machine having a first cost of $20,000 is expected to save $1500 in the first year of operation,…

A: Information Provided Machine first cost = $20,000 Savings in the first year = $1500 Increment in…

Q: A large standby electricity generator in a hospital operating room has a first cost of $67,250 and…

A: in this we have determine annual worth and find out minimum annual worth.

Q: construction firm can achieve a $15,000 cost savings in Year 1, increasing by $3000 each year for…

A: Using present value and PMT function in Excel

Q: The cost to manufacture a firing system component used in a rapid deployment missile defense system…

A: F = $20,000,r=0.10 (10% interest rate per year in decimal form),n=52 (compounded weekly, so there…

Q: The cost of utilities (e.g. water and electricity) of a company is expected to increase at a rate of…

A: Introduction Equivalent annual cost The equivalent annual cost is the overall amount of…

Q: what is maintenance costs each year (from year 1 to year 5). ...

A: We can determine the maintenance costs per year using the formula below:Maintenance cost from year 2…

Q: Consider a piece of industrial equipment that has an installed cost of $ 100,000. The equipment is…

A: Answer : Present value of Annual Savings is calculated as under: Total Present Value of Annual…

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

100%

. Energy costs for a green chemical treatment have been increasing uniformly for 5 years. If the cost in year 1 was $26,000 and it increased by $2000 per year through year 5, Find the present worth of the costs at an interest rate of 10% per year.

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

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, accounting and related others by exploring similar questions and additional content below.

Similar questions

The cost for manufacturing a component used in intelligent interface converters was $23,000 the first year. The company expects the cost to increase by 2% each year. Calculate the present worth of this cost over a five-year period at an interest rate of 10% per year.
DuraTech Manufacturing is evaluating a process improvement project. The estimated receipts and disbursements associated with the project are shown below. MARR is 6%/year. Solve, a.What is the future worth of this investment?b. What is the decision rule for judging the attractiveness of investments based on future worth? c. Should DuraTech implement the proposed process improvement?
Standby power for a manufacturing firm is currently produced using diesel-powered generators. In three years the company can switch to natural gas-powered generators. The company believes it can save $29,02 per year through year 7. If the company uses an interest rate of 5%, what is the present value at time 0 of the projected savings that will occur in years 3 through 7?
construction an environment friendly green home costs 15% more than a same-sized conventional home. For $450,000 how much would have to be saved in energy expenses per year to justify this home using the B-C ratio method. The rate is 10% per year, and the expected life of the home is 20 years.
A company is going to change all light bulbs of its buliding. The initial cost is 57000. all bulbs has been replaced at the same time. what if the bulbs have been replaced during 5 yrs period. Inflation rate is 3 percent. energy saving per yr is 6000 dollars. (compare replacement at the same time to the period of 5 yrs
A road requires no upkeep until the end of 3 years when P100,000 will be needed for repairs. After this, P80,000 will be needed for repairs at the end of each year for the next 6 years, then P130,000 at the end of each year for the next 6 years. If money is worth 14% compounded annually, what was the equivalent uniform annual cost for the 15-year period? Kindly anwer this engineering economy problem. Thank you
The purchasing price for a dye press is $30,000. It is expected to provide labour cost savings of $5,000 in year 1. The savings are expected to increase linearly by X$ each year for seven years. Find the dollar value of X such that the purchase price is justified by the labour savings at MARR = 5%.The solution is with $1 of which of the following?65.8067.8069.8071.80None of the above
The Fence Company is setting up a new production line to produce top rails. The relevant data for two alternatives are shown below. Solve, a. Based on MARR of 8%, determine the annual rate of production for which the alternatives are equally economical. b. If it is estimated that production will be 300 top rails per year, which alternative is preferred and what will be the total annual cost?
Andes, Inc. is considering the replacement of its manual material handling equipment with autonomous vehicles at a net initial cost of $12 million. The expected annual savings in operating costs are as shown below. MARR is 10% per year compounded annually. End of Year 1 2 3 4 5 6 3 4.5 4.5 Annual savings (millions) | 2.25 | 2.25 | 3 Compute the simple payback period for this replacement option. Determine the discounted payback period (DPBP). It is enough if you determine in which year the DPBP falls.
A new airconditioning unit costs P150,000and will have a salvage value of P15,000after 5 years. Electrical cost per kWh isP1.25. Calculate the annual savings in termsof electrical savings if MARR is 15% per year.
Oriole Manufacturing is considering the purchase of new computerized equipment. The machine costs $66000 and would generate $19360 in annual cost savings over its 5-year life. At the end of 5 years, the equipment would have a $4400 salvage value. Oriole's required rate of return is 12%. Click here to view the factor table. Using the present value tables, the machine's net present value is (round to the nearest dollar) O $466. O $3789. O $6286. O $69789.