I have purchased a machine worthP1.877,187.00. And it needsmaintenance at the end of every 6months starting 5 years after itspurchased date and maintenance willbe needed for the next 10 years ofits useful life. The maintenance costis equivalent to the 2% of the totalmachine cost. How much moneyshould be prepare today to financethe requirement if the interest rate is0.10 compounded quarterly?

First we need to calculate present value of all maintenances by using this formula PV =pmt1-1(1+i)ni…

Answered: I have purchased a machine worth…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

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The maintenance on a machine is expected to be P3,500, P7,000, P10,500, and 14,000 for the second, third, fourth, and fifth year, respectively. Then the present equivalent value at the beginning of the first year if the interest is 6% per year is Blank 1. Blank 1 Add your answer
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