Question For an engineering project, the following payments have been estimated to be paid at their certain time as folow: 1. The initial construction cost is $1000000 which should be paid at the beginning of the construction period (time-0). 2. Extra expenditures are planned to be paid during operation period, which are: -$ 20000 at the end of the first month, - $10000 at the end of the second month which decreases by $1000 at the end of every month of the next 8 months, - S5000 at the end of the tenth month. - Twenty unitorm payments of $1000 at the end of each of the successive month starting from the end of the first year. It the interest rate is %12 compounded monthly, draw the cash flow diagram and find the present worth of the project
Question For an engineering project, the following payments have been estimated to be paid at their certain time as folow: 1. The initial construction cost is $1000000 which should be paid at the beginning of the construction period (time-0). 2. Extra expenditures are planned to be paid during operation period, which are: -$ 20000 at the end of the first month, - $10000 at the end of the second month which decreases by $1000 at the end of every month of the next 8 months, - S5000 at the end of the tenth month. - Twenty unitorm payments of $1000 at the end of each of the successive month starting from the end of the first year. It the interest rate is %12 compounded monthly, draw the cash flow diagram and find the present worth of the project
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 8DQ: Describe the cost formula for a strictly fixed cost such as depreciation of 15,000 per year.
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For an engineering project, the following payments have been estimated to be paid at
their certain time as folow:
1. The initial construction cost is $100000 which should be paid at the beginning
of the construction period (time-0).
2. Extra expenditures are planned to be paid during operation period, which are:
-$ 20000 at the end of the first month,
- S10000 at the end of the second month which decreases by $1000 at the end
of every month of the next 8 months.
- $5000 at the end of the tenth month,
- Twenty uniform payments of $1000 at the end of each of the successive
month starting from the end of the first year.
If the interest rate is %12 compounded monthly, draw the cash flow diagram and
find the present worth of the project.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe3ee1c82-2eba-4e68-a3df-702be2394929%2F5b3b2e4d-9e6c-41c0-9972-232ee794a81c%2Frfa584g_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question
For an engineering project, the following payments have been estimated to be paid at
their certain time as folow:
1. The initial construction cost is $100000 which should be paid at the beginning
of the construction period (time-0).
2. Extra expenditures are planned to be paid during operation period, which are:
-$ 20000 at the end of the first month,
- S10000 at the end of the second month which decreases by $1000 at the end
of every month of the next 8 months.
- $5000 at the end of the tenth month,
- Twenty uniform payments of $1000 at the end of each of the successive
month starting from the end of the first year.
If the interest rate is %12 compounded monthly, draw the cash flow diagram and
find the present worth of the project.
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