What is the equivalent annual cost in years 1 through 10.00 of a contract that has a first costof $61,000 in year O and annual costs of $16,000 in years 3 through 10.00? Use an interestrate of 12.00% per year. (Round the final answer to three decimal places.)The equivalent annual cost is determined to be $ 42958 X

The EAC of a project refers to the cost of the regular operations of the project after they have…

Answered: What is the equivalent annual cost in…

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

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Problem 03.013- Annual worth calculations What is the equivalent annual cost in years 1 through 8.00 of a contract that has a first cost of $62,000 in year 0 and annual costs of $20,000 in years 3 through 8.00? Use an interest rate of 9.00% per year. (Round the final answer to three decimal places.) The equivalent annual cost is determined to be $
Three payments are scheduled as follows: $1,500 is due today, $1,200 is due in five months, and $2,100 is due in eight months. The three payments are to be replaced by a single equivalent payment due ten months from now. What should the payment be if money is worth 6.5%? Use ten months from now as the focal date. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Payment LA
A contract calls for payments of $2800 at the end of every 6-month period for 8 years and additional payments of $6000 at the end of 5 years and $7500 at the end of 8 years. What is the present worth of the contract at 7.5% p.a. compounded continuously?
You are offered a $3,000,000 contract to be paid to you over 6 years at $500,000 per year. The first payment will be made at the end of the year. If the current market interest rate is 3.5%, what is the contract really worth to you? $2,500,000.00 $3,275,076.09 $2,664,276.51 $3,000,000.00
An installment contract for the purchase of a car requires payments of $346.34 at the end of each month for 2 years. Interest is 5% per annum compounded monthly. (a) What is the amount financed? (b) How much is the interest cost? (a) The amount financed is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The interest is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
3. Consider the buyer of a FRA 6-9. The contract rate is 6.35% on a notional amount of $10 million. Calculate the settlement amount of the seller if the settlement rate is 6.85%. Assume a 30/360 day count basis.
A contract calls for a payment of P 1,200 at the beginning of each month for 12 months. At what rate compounded annually would this agreement be equivalent to a cash payment of P 13,590? Select one: O a. 13.63% O b. 10% O c. 12% O d. 12.45%
A leasing contract calls for an immediate payment of $108,000 and nine subsequent $108,000 semiannual payments at six-month intervals. What is the PV of these payments if the annual discount rate is 12%? (Hint: First find the semiannual rate that is equivalent to the annual rate.) Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
What is the equivalent AW of a one-year contract that pays $6,000 in the first month and increases by $700 for each month thereafter? MARR = 9% compounded monthly. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 0.75% per month. Choose the correct answer below. OA. The AW is $75,608. OB. The AW is $123,339. Oc. The AW is $200,736. OD. The AW is $122,420. OE. The AW is $47,730.
The payments required on a contractual obligation are $800 per month. The contract was purchased for $9,250 just before a regular payment date. The purchaser determined this price based on a required rate of return of 4.3% compounded monthly. How many payments will be required, include the partial final payment? 12 payments 24 payments 9 payments 6 payments 18 payments

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