Find the present worth of earthmoving equipment that has a first cost today of $147,000, an annual operating cost of $58,000, and asalvage value of 20% of the first cost after 5 years, these estimates being in future dollars. Assume that the real interest rate is 12.00%per year and that inflation has averaged 7.000% per year. Solve with inflation (a) not accounted for and (b) accounted for.a) The present worth with inflation not accounted for is $b) The present worth with inflation accounted for is $

Present Worth Calculations for Earthmoving Equipment:Given:First Cost (Today) = $147,000Annual…

Answered: Find the present worth of earthmoving…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION-2 Someone calculated the-future worth of his investment in term of today's dollars. The obtained result was $/945.89s, The life of the investment is expected to be 20 years. The average annual inflation rate along this period is 7%. If it is known that the investor earns 149% per year from this investment, what is the first cost of the investment?
A machine cost P 20,000 today. If the inflation is 6% per year and interest is 10% per year, what will be the appropriate future value of the machine adjusted for inflation in 5 years? (don't use excel)
Your aunt Janet bought a land for $125,000 cash 12 years ago. The inflation rate has avearged 4% per year for the last 12 years. She wants to sell her property now, exactly 12 years after the property was purcahsed. She would like to have a 9% after-tax real rate of return. If capital gain tax rate is 15%, what should be her selling price.
Canada's government savings bonds pay 2.5% annual real rate of return compounded daily. Professor Jones invests $50 weekly as a part of his university payroll program. If the inflation rate is assumed to be 3% per year over the next 12 years, what is the purchasing power of the professor's bonds 12 years from now. Please Include the effects of inflation at 3% on the Purchase power answer. Thank you!
A self-employed chemical engineer is on contract with Dow Chemical, currently working in a relatively high-inflation country. She wishes to calculate a project’s PW with estimated costs of $35,000 now and $7000 per year for5 years beginning 1 year from now with increases of 12% per year thereafterfor the next 8 years. Use a real interest rate of 15% per year to make the calculations(a) without an adjustment for inflation and (b) considering inflation at a rate of 11% per year.
8 years ago a machine cost $774000. Now, the same machine costs $1546000. The average rate of inflation per year is close to: 6.77% 13.55% 4.52% None of the given answers 9.03%
You would like to buy carcar t is currently on themarket at $85,000, but you cannot afford it right now. However, you think that youwould be able to buy it after 4 years. If the expected inflation rate as applied to the priceof this car is 6% per year, what is its expected price after 4 years?
Please no written by hand solution A homebuilder’s advertising had the caption, “Inflation to Continue for Many Years.” The ad explained that if one buys a home now for $297,000, and construction cost inflation continues at 7%, the home will be worth $819,400 in 15 years. Thus, by buying a new home now, one can realize a profit of $522,400 in 15 years. Do you find this logic persuasive? Explain. Please show excel formulas
5
Compare the alternatives below on the basis of their capitalized costs with adjustments made for inflation. Use i=9% per year and f= 2.6% per year. Alternative X Y -17,500,000 -25,000 105,000 -12,000,000 -10,000 82,000 10 First cost, $ AOC, $ per year Salvage value, $ Life, years 00 The capitalized cost for alternative X is $-17711255.7039 O The capitalized cost for alternative Y is $ Select alternative
If the inflation rate is 4.8% per year and themarket interest rate is known to be 10.2% per year,what is the implied real interest (inflation-free) ratein this inflationary economy?
The cost of constructing a roundabout (R/A) in a low-traffic residential neighborhood 5 years ago was $625,000. A civil engineer designing another R/A that is almost the same design estimates the cost today will be $740,000. If the cost had increased only by the inflation rate over the 5 years, determine the inflation rate per year.

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