The cost of supplies for a 10-year project increases by P900 every year, starting at the end of the second year. There is no supplies cost at the end of the first year. If the interest rate is 6.7% per year, determine the present amount that must be set aside at time zero to take care of all the future supplies expenditures.

Q: Project A costs $4,800 and will generate annual after-tax net cash inflows of $1,700 for five years.…

A: Net Present value = Present Value of Cash Flow - Initial Investment

Q: A certain amount of investment was made annually for 10 years at an interest rate of 6%. On the 14th…

A: Present Value: Amounts of money or streams of cash flows that are anticipated in the future are…

Q: Maintenance cost for a small bridge expected to last for 60 years is estimated to be Php1,000 each…

A: The yearly cost of owning, operating, and sustaining an asset throughout its entire life is referred…

Q: An obligation can be settled by making a payment of $16,000 now and a final payment of $30,000 in 3…

A: The time value of money states that the worth of the money received in the future is always lower…

Q: An obligation can be settled by making a payment of $16,000 now and a final payment of $30,000 in 3…

A: The present value for both the options can be used as a basis for comparision between the options.…

Q: Calculate the perpetual equivalent annual cost (years 1 to ∞) of $825,000 now and $1,000,000, 8…

A: Cost now (C0) = $ 825,000 Cost after 8 years (C8) = $ 1,000,000 Period (n) = 8 Years Interest rate…

Q: If you save $1,900 at the beginning of every year for ten years, for how long can you withdraw…

A: Annuity refers to a cashflow screen of equal amount at equal time intervals or in simple words…

Q: An investment proposal calls for $391.063.59 payment now and a second $351,358.37 9 years from now.…

A: The uniform annual cost is used to find out the annual amount required to operate the project over…

Q: ve purchased a machine worth P1,564,748.00. And it needs maintenance at the end of every 6 months…

A: Present value of the money can be found by the interest rate and period given by using the formula.

Q: The annual maintenance cost of a generator is P1000 after 1 year and it is estimated to increase 10%…

A: Discounting is a technique which is used to compute the present value (PV) of future amount by…

Q: Project A costs $4,700 and will generate annual after-tax net cash inflows of $1,800 for five years.…

A: Given: Cost = $4,700 Net cash inflows = $1,800 Period = 5years rate = 12%

Q: Hyundai Motor Co. plans to set aside an annual payment of $18,000 per year for 4 years for…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: P2000 is invested in a high interest account for one and half (1 1/2) years . the interest rate is…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

Q: What amount must be set aside now to generate payments of $30,000 at the beginning of each year for…

A: Annual payment (P) = $30,000 Interest rate (r) = 5.52% Period (n) = 10 Years

Q: 3% compounded annually, what was the equivalent uniform annual cost for the 12-year period? Include…

A: An item of expenditure on a capital asset that brings back the asset to its working position is…

Q: semiannual payments must be set aside into a sinking fund to replace the equipment in eight years if…

A: Original cost today = 650000  Salvage value at end of 8th year = 50000 Inflation rate = 2%   Cost of…

Q: Calculate the perpetual equivalent annual cost (years 1 to ∞) of $950,000 now and $775,000, 8 years…

A: In year 0,Cash flow= 950000 + 775000/(1 + 0.11)^8= 1286293.0346

Q: The maintenance costs of a new boiler are estimated as follows: P 600 per year for the first 3…

A: As per question , we are provided : Future value of all maintenance = P20000 Compounding rate = 6%…

Q: A sum of P10,000 was invested now and left for 6 years, at which this time the principal is…

A: Invested amount (P) = P 10,000 Interest rate (R) = 15.8% Period till first withdrawal (N1) = 6 Years…

Q: The annual maintenance cost of a generator is P834 after 1 year and it is estimated to increase by…

A: Annual Maintenance Cost = 834 End of period cost structure Increase in annual maintenance costs =…

Q: How much was initially invested if the value of the investment is at P200,000 after 3 and a half…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: A sum of money invested now at 10 percent compounded semi-annually is to provide payments of $1500…

A: Let the money to be invested now = X Semiannual payment (A) = $1500 Number of payments (n) = 16 r =…

Q: he interest rate is 8% p.a. compounded annually. A project requires an investment of $1000…

A: Net present value is employed to assess a project's or investment's profitability. It is determined…

Q: The maintenance on a machine is expected to be ₱8984 for the second year and an additional ₱1,750…

A: Annual cost for 6 years = 1,750 Total Cost for the second year = 10,734 (8,984 + 1,750) Interest…

Q: If $17,500 is invested at an interest rate of 10% per year, find the value of the investment at the…

A: Present Value (PV)= $17,500 Interest Rate (r)= 10% per year Time period (n)= 5 years Future Value at…

Q: A house is expected to have a maintenance cost of $1000 the first year. It is believed that the…

A: The annual maintenance cost is an increasing annuity. Here we need to find the equivalent annual…

Q: Compute the present value of a perpetual investment that would pay P25,000 every year if the…

A: To calculate the present value we will use the present value of perpetuity formula as follows:…

Q: If 14700 dollars is invested at an interest rate of 9 percent per year, compounded semiannually,…

A: Using excel FV function

Q: crete road requires no upkeep until the end of 3 years when P54, 000 will be needed for repairs.…

A: The annual cost of owning, operating, and maintaining property for the rest of its life is known as…

Q: Compute to the penny the present value of $5,000 dollars to be paid at the end of four years if (a)…

A: Future value is a financial concept that refers to the projected value of an investment or asset at…

Q: The procurement of a solar system requires a down payment of $119,628 at t=0 and a payment of $8,493…

A: Present value of an investment refers to the sum total value of all expected future cash flows in…

Q: A company estimates that it will need $375,000 in 11 years to replace an important machine. If it…

A: We need to use future value of annuity formula to calculate payment size  PMT =FVn(1+i)n -1i Where…

Q: If 14700 dollars is invested at an interest rate of 9 percent per year, compounded semiannually,…

A: The amount at the end of a specific number of years will be the future value of the initial deposit.

Q: At an interest rate of 10% per year, determine the perpetual equivalent annual cost of: $70,000 now,…

A: The cash flows that are started immediately after the investment and go on for an infinite time…

Q: A constructed bridge requires no upkeep until the end of 2 years when P60,000 will be needed for…

A:

Q: An annual maintenance cost of a generator is P1000 after two years and it is estimated to increase…

A: The question is based on the concept of Financial Accounting. As the cost is increasing by 10% per…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.