For the following cash flow series, a. Show both hand and spreadsheet solutions that calculate the expected present worth if each series may be realized with the probability shown at the head of each column. Let I = 20% per year b. Determine the expected annual worth value for the same cash flow series. Year 0 1 123 2 Annual Cash Flow, $ per year Prob = 0.5 -5000 1000 1000 1000 Prob = 0.2 -6000 500 1500 2000 Prob = 0.3 -4000 3000 1200 -800

For the following cash flow series, a. Show both hand and spreadsheet solutions that calculate the expected present worth if each series may be realized with the probability shown at the head of each column. Let I = 20% per year b. Determine the expected annual worth value for the same cash flow series. Year 0 1 123 2 Annual Cash Flow, $ per year Prob = 0.5 -5000 1000 1000 1000 Prob = 0.2 -6000 500 1500 2000 Prob = 0.3 -4000 3000 1200 -800

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Q) A civil engineer planning for her retirement places 11% of her salary each year into a high-technology stock fund. If her salary this year (end of year 1) is $200,000 and she expects her salary to increase by 4% each year, what will be th future worth of her retirement fund after 14 years provided it earns 8% per year? Solve it correctly. Typed or handwriting with concept use. Not solve in excel works.
DRAW ALL CASH FLOW DIAGRAMS 1. Barbara wants to triple the money currently in her account that earns 3.5% per year interest. How long does she need to wait? 2. Joe deposits S8,000 right now and another $3,000 5 years from now. How much money will be in the account 12 years from now? Rate is 4% per year 3. Joe (the same one above) deposits $8,000 now and withdraws $3,000 5 years from now. How much money will be in the account 12 years from now? 4. Jane deposits $2,500 into an account that carns 4.5% per year. 3 years later, the interest rate goes up to 6.5% How much money she will have 8 years after the initial investment? 5. Tim starts his freshman year and would like to take a trip to Europe upon graduation that will cost $5,600. How much he should be saving every year, including his senior year to be able to afford this trip. His bank account earns 4.5% per year interest.
If APC is constant, C and Yshould also be constant. True or False
An electronics firm is planning to manutacture a new handheid gaming device tor the preteen market The data have been estimated tor the product Assuming a negligible market (salvage) value tor the equipment at the end of tive years, determine the breakeven annual sales volume for this product. E Click the icon to view the data estimated for the product A Click the icon to view the interest and annuity table for discrete compounding when i= 15% per year. The breakeven annual sales volume is 5000 units. (Round to the nearest whole number) More Info Sales price $12.50 per unit Equipment cost Ovorhoad cost Operating and maintenance cost Production lime per 1,000 units Study period (planning horizon) $200,000 $50.000 per yoar $25 per operating hour 100 hours 5 years 15% per year MARR
TRUE OR FALSE For any economy study based on our discussions, it is always necessary to determine the profit to evaluate thebetter/best alternative. If simple interest is evaluated, then the interest obtained will always be directly proportional to the number of yearsassuming that a constant interest rate is used throughout these years.
Peter has decided to make a deposit of $500 each quarter (starting next quarter) for 5 years. If the interest rate is 16%/year compounded monthly, the closest equivalent future value right after his last deposit is 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.
Problem #2 Solve for the following: 1) Present worth equivalence 2) Annual worth equivalence spread from years 1 to 10 3) Future worth equivalence at the end of year 8 4) Future worth equivalence at the end of year 10 i= 10% 10 A = $3000 P=?
Example: Series and Random Amounts Akramin plans to have RM 100 000, ten years from now, which the rate of return given is 10%. Analyse the alternatives to achieve above target through: 1. Deposit required now (present worth P7 in year 0) 2. Yearly deposit if he start to invest now. 3. Yearly deposit if he start to invest 5 years from now. 4. Yearly deposit if he plan only to invest from now for 5 years.
A recent study conducted in January of 2016 indicated that the mean annual salary for engineers was $98,300 per year. Another study indicates that the peak average salary for liberal arts majors is $58,000 per year. Assuming that most college graduates will work for 50 years and that the time value of money averages 5% per year, compute the future worth of an engineer's salary and the future worth of a liberal arts major's salary. Compute the difference between the two future worth amounts.
Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of $130,000. Annual maintenance expenses are expected to be$6,500for the first8years and$8,500 each year thereafter upto 25years. With an interest rate of 9% per year, what is the present worth cost of this project? Choose the closest answer below. A) $202,422 B $238,597 C) $249,468 D) $277,339
A) A manufacturer has a monthly fixed cost RM100 000 and a production cost of RM14 for each unit produced. The product sells for RM20 per unit. of What is cost function? What is the revenue function? What is profit function? -) RM 10,000 is invested for 8 years 3 months. This investment is offered 10% compounded monthly for the first 4 years & 12% compounded quarterly for the rest of the period. Calculate the future value of this investment.
In Year 2532, the world is “Exactly” different. Every second, minute, hour counts in comes to interest. Compute the future amount of an investment P 100,000 with an interest of 15% after 74 days, 2 hours, 6 minutes and 20 seconds