its trucks. It anticipates s EOY 1, $2,000 in EOY 2, a The interest rate is 10% per a. What is the value of exp b. What is the present equ at time 0? row c. What is the annual equ 1-5?

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 15PROB
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4-59. A transport company sets aside funds to maintain
its trucks. It anticipates spending $3,000 on repairs in
EOY 1, $2,000 in EOY 2, and $1,000 for the next 3 years.
The interest rate is 10% per year. (4.10)
a. What is the value of expenses if the interest rate is 0%?
b. What is the present equivalent of the repair expenses
at time 0?
blir
c. What is the annual equivalent expense during years
ban.gouella
1-5?
Transcribed Image Text:4-59. A transport company sets aside funds to maintain its trucks. It anticipates spending $3,000 on repairs in EOY 1, $2,000 in EOY 2, and $1,000 for the next 3 years. The interest rate is 10% per year. (4.10) a. What is the value of expenses if the interest rate is 0%? b. What is the present equivalent of the repair expenses at time 0? blir c. What is the annual equivalent expense during years ban.gouella 1-5?
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