The maintenance cost in year 1 is $23000, increasing by 7% each year. What is the present worth of this over 9 year period at an interest rate of 13% per year?

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A: The PV of an investment refers to the value of all the future cash flows that the investment…

Q: What is the future value of a property at the end of 5 years whose present value is currently…

A: Future Value is the value at some future time of a present amount of money, or a series of payments,…

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A: Present value of future value is the equivalent value of money today considering the interest rate…

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A: To calculate the present value of payment that will receive after 1 year we will use the below…

Q: How much is the sum of the present value of the expected return over those periods

A: Cash Flows (Year 1-10) (CF) =  $15,000 per year Annual interest rate (r) = 5% Time Period (t) = 10…

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A: We need to use future value formula to calculate equivalent future value after 8 years.FVn = Future…

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…

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A: Given information: Present value is $4,500 Number of years is 7 Interest rate is 11%

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A: Present Value = future value discounted at 7.25%

Q: The sum of $100 is invested at an annual compound interest of 6%. How long will it take for the…

A: Compound interest refers to the method of calculation of interest on investment where the amount…

Q: What is the equivalent present worth of the costs

A: Present value (PV) of growing annuity refers to an annuity which shows the current value of all the…

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A: The present value of money refers to the concept that a dollar received in the future is worth less…

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A: Present Value: It represents the current worth of the future expected cash flows. It is computed by…

Q: What is the future value of a stream of receipts that is $1,000 in year 1 and which increases by 4%…

A: The future value of this stream of receipts can be calculated using the future value of an annuity…

Q: An engineering project has an investment amount of $129011 with an annual net profit of $52364 for 5…

A: Investment = $ 129011 Annual net profit = $ 52,364 Period = 5  Years Interest rate = 15% Inflation…

Q: what is the equivalent annual cost of the maintenance?

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: What is the IRR of an investment that costs $70,500 and pays $27,500 a year for 4 years?

A:

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: what annual rate of return is needed to receive $930 in one year on an investment of $ 18,600?

A: Simple interest refers to the method of interest calculation where the principal amount remains…

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…

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A: Given Information:Annual maintenance cost per year is P1500 Increment in annual cost each year is…

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A: Annual equivalent cost is that is equivalent to the cost today considering the interest rate and…

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A: Future value of amount is computed as follows:-FV = A * (1+r)nwhereFV = future value A = amount…

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A: Future value = Present value*e^rate*time

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A: Annual worth of a project means the amount which is going to be generated by the project on an…

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A: Investment amount (P) = P 1,387 Period = 22  Years Number of semi annual periods (n) = 22*2 = 44…

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A: Future value(FV) is the value of initial investments at a future date after compounding it with a…

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

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A: The equivalent annual cost of the maintenance is the cost over the entire period of maintenance…

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A: Please see the next step for the solution

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

Q: A $50,000 investment is compounded continuously at 6.35% for 25 years? What is the maturity value…

A: Interest can be received as compound interest or simple interest. Under the compound interest…

Q: An engineering project has an investment amount of $127420 with an annual net profit of $53826 for 4…

A: Here nominal rate of discount = 15% and we will use the nominal cash flows. Nominal cash flow = real…

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A: Future value (FV) = $ 100,000 Annual interest rate (r) = 10% Period (n) = 25 Years

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.