The State of Chiapas, Mexico, decided to fund a program for improving reading skills in elementary school students. The first cost is $300,000 now and an update amount of $160,000 every 5 years forever. Determine the perpetual equivalent annual cost at an interest rate of 11% per year. The perpetual equivalent annual cost is determined to be -$

The State of Chiapas, Mexico, decided to fund a program for improving reading skills in elementary school students. The first cost is $300,000 now and an update amount of $160,000 every 5 years forever. Determine the perpetual equivalent annual cost at an interest rate of 11% per year. The perpetual equivalent annual cost is determined to be -$

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

See similar textbooks

Similar questions

A southwestern city that has 170,000 households is required to install treatment systems for the removal of arsenic from drinking water. The annual cost is projected to be $50 per household per year. Assume that one life will be saved every three years as a result of the arsenic removal system andthat the EPA values a human life at $4.8 million. Use a discount rate of 8% per year and assume the life is saved at the end of each three-year period.Utilize a conventional B/C ratio to determine if the project is economically justified.
The state of Glottamora has $100 million remaining in its budget for the current year. One alternative is to give Glottamorans a one-time tax rebate. Alternatively, two proposals have been made for state expenditures of these funds. The first proposed project is to invest in a new power plant, costing $100 million and having an expected useful life of 20 years. Projected benefits accruing from this project are as follows:YEARS BENEFITS PER YEAR ($ MILLIONS)1–5 06–20 20The second alternative is to undertake a job retraining program, also costing $100 million and generating the following benefits:YEARS BENEFITS PER YEAR ($ MILLIONS)1–5 206–10 1411–20 4The state Power Department argues that a 5 percent discount factor should be used in evaluating the projects because that is the government’s…
Four mutually exclusive projects are being considered for a new two-mile jogging track. The life of the track is expected to be 80 years, and the sponsoring agency’s MARR is 11% per year. Annual benefits to the public have been estimated by an advisory committee and are shown below. Use the IRR method to select the best jogging track. Note: Show final answer in percentage value. Limit your answer to one decimal place. Ex: 12.5% Answer the following: IRR Alternative C = Blank 1% IRR Alternative D = Blank 2% The Preferred Alternative (Write only the letter if A,B,C or D )= Blank 3
A southwestern city has a contract with Firestone Vehicle Fleet Maintenance to provide maintenance services on its fleet of city-owned vehicles such as street sweepers, garbage trucks, backhoes, and carpool vehicles. The contract price is fixed at $75, 000 per year for 4 years What are the maintenance costs in each of the following 4 years in constant dollars with base year of today? Assume current market interest rate of 10% per year and inflation rate of 6% per year over the following 4-year period. Include both a CFD in actual dollars and a CFD in constant dollars.
A $3.6 million state lottery pays $15,000 at the beginning of each month for 20 years. How much money must the state actually have in hand to set up the payments for this prize if money is worth 5.3%, compounded monthly?
Cullumber Excavating Inc. is purchasing a bulldozer. The equipment has a price of $99,800. The manufacturer has offered a payment plan that would allow Cullumber to make 10 equal annual payments of $19,900.00, with the fırst payment due one year after the purchase. How much total interest will Cullumber pay on this payment plan? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Total interest $4
A student will receive a $25,000 grant at the beginning of every year for the next five years. Assuming an annual interest rate of 4% is appropriate, the present value of an ordinary annuity is 4.4518 x $25,000 = $111,295, and the present value of an annuity due is 4.6299 x $25,000 = $115,748. What is the fair value of the grant payments according to the Financial Accounting Standards Board (FASB)? $130,000 $115,748 $125,000 $111,295
Under a government environment incentive plan companies installing air-pollution control equipment are entitled to a 50% grant to offset the purchase and maintenance costs. Company ABC decides to avail of this incentive by acquiring equipment costing Php 500,000. The maintenance costs are estimated to be Php 40,000 in the first year, rising annually by Php 3,000. If the equipment’s useful life is 10 years, and annual interest rate is 6% compounded half-yearly, how much will the grant be? 18. Under a government environment incentive plan companies installing air-pollution control equipment are entitled to a 50% grant to offset the purchase and maintenance costs. Company ABC decides to avail of this incentive by acquiring equipment costing Php 500,000. The maintenance costs are estimated to be Php 40,000 in the first year, rising annually by Php 3,000. If the equipment’s useful life is 10 years, and annual interest rate is 6% compounded half-yearly, how much will the grant be?
Jackson Clinic is starting an endowment fund to pay for the expenses of a allied health training program. The expenses are $2,500,000 per year, and the program needs to be endowed for 50 years. Assuming payments are made at the end of each year and the interest rate is 7% per year, what should be the initial size of the endowment?
A firm wants to sponsor a new engineering lab at a local university. This requires $4M to construct the lab, $1.5M to equip it, and $750,000 every 6 years for new equipment. What is the required endowment if the university will earn 8% interest on the funds? Answer: $6,777,957
Blackstone Company purchased a new software system costing $35,000. To finance the purchase, Blackstone signed a contract agreeing to pay the cost over the next 8 years, with a payment due every six months; the first payment will be made six months from the date of purchase. Blackstone's usual interest rate is 10%. What is the amount of the payment required (rounded to the nearest dollar)? 's usual 096, What is the amount of the Select one: O a. 16,030 O b. 6,560 O c. 3,229 d. 2,575 e. None of the above
The department of transport will collect 5$ toll from each vehicle to recover the cost of a newly- built highway. In the first year (end of year 1), 10,000 cars are expected to use the highway followed by 4% annual increase in traffic due to the expansion of the city. Determine the equivalent present worth of this project over 20 years' time and at an interest rate of 8%?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS