You have been asked to evaluate a few options to deal with the environmental damage associated with the Sakhalin-2. A) Assume you will need to invest money today into a sinking fund account to fund the $10 -Billion-dollar reclamation in year 5. How much money do you need to invest today (time zero)? Assume you have other opportunities to earn money at 15% now and in the future. B) Assume you will need to invest money each year over the next five years (Years 1-5). How much money do you need to invest each year to fund the $10-Billion-dollar clean up? Assume you have other opportunities to earn money at 15% now and in the future.

You have been asked to evaluate a few options to deal with the environmental damage associated with the Sakhalin-2. A) Assume you will need to invest money today into a sinking fund account to fund the $10 -Billion-dollar reclamation in year 5. How much money do you need to invest today (time zero)? Assume you have other opportunities to earn money at 15% now and in the future. B) Assume you will need to invest money each year over the next five years (Years 1-5). How much money do you need to invest each year to fund the $10-Billion-dollar clean up? Assume you have other opportunities to earn money at 15% now and in the future.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

You are planning to invest $4,000 in an account earning 8% per year for retirement. a. If you put the $4,000 in an account at age 23, and withdraw it 50 years later, how much will you have? b. If you wait 10 years before making the deposit, so that it stays in the account for only 40 years, how much will you have at the end? a. If you put the $4,000 in an account at age 23, and withdraw it 50 years later, how much will you have? In 50 years you would have $750424. (Round to the nearest cent.)
You are an avid 34 year old coffee drinker, and never miss a day without your $4.00 Starbucks caffe latte. However, you also understand the importance of the time value of money and saving for retirement early, so you set a New Year's Resolution to abstain from your coffee-drinking ways this year. At the end of the year, you will place all of your coffee savings in a retirement account. How much will this savings amount to when you retire in 30 years at the age of 65, if invested at a 7.5% annual interest rate (rounded to the nearest dollar)? Assume that the cost of the cup of coffee remains unchanged throughout the year.
You inherit $10K when you are 20. What is this worth when you are ready to retire at 65? Assume that the money can be invested at 7%, which is your interest rate for the time value of money. Compare this with an insurance policy that could be purchased with a lump-sum payment of $10K. That policy would pay you $100K at age 65 and your survivors $100K if you die sooner. How much value per year must you put on protecting your survivors for these to be equivalent?
How do you get from step 3 to step 4 - (-11)/5
Suppose that you plan to retire at 65. You invest $8,000 per year on your birthday for 10 years starting on your 25th and ending on your 34th birthday. Since you are young, you take more risks with your investments, and earn a rate of return of 12%. Then, you have children and decide to put all your retirement savings into investing in a college fund for them. You leave all accumulated funds in the retirement account, and it earns 6% per year, reflecting an (unwise) rise in caution during middle age. How much money will you have to retire on at 65 (31 years after you stop contributing)
1. You have been tasked with overhauling the widget assembly line in your company's factory. The overhaul will involve an initial cost of $230,000 and will have a total lifespan of 13 years. Beginning in year 3, when the overhaul is completed, you expect a decrease in operating costs of $38,000 annually. This will last for 9 years, ending in year 11. For the final 2 years (though year 13), the savings will be only $11,000 per year. What is the NPV of this cash flow at a corporate cost of money of 4%?
1. You have been tasked with overhauling the widget assembly line in your company's factory. The overhaul will involve an initial cost of $230,000 and will have a total lifespan of 13 years. Beginning in year 3, when the overhaul is completed, you expect a decrease in operating costs of $38,000 annually. This will last for 9 years, ending in year 11. For the final 2 years (though year 13), the savings will be only $11,000 per year. What is the NPV of this cash flow at a corporate cost of money of 4%? 1.a. Using the same discount rate, what is the Net Future Value (NFV) of the cash flow in Question 1?
You have just purchased 200 shares of General Electric stock at $15 per share. You will sell the stock when its market price doubles. If you expect the stock price to increase 12% per year, how long do you expect to wait before selling the stock? (See Figure.)
A study by the New York Federal Reserve Bank concludes that an engineering bachelor’s degree generates approximately a 15% return on investment over the course of a decade. Suppose the typical engineering student spends $15,000 per year for four years on his/her education. What extra annual return (in dollars) does the typical student realize during the 10 years following graduation? State your assumptions.
At age 38, you start saving for retirement. If your investment plan pays an APR of 7% and you want to have $0.9 million when you retire in 27 years, how much should you deposit monthly? You should invest $X each month. (Do not round until the final answer. Then round to two decimal places as needed.)
9 A one-year investment has quarterly returns of 2.0% in Q1, -15.6% in Q2, 13.7% in Q3 and 9.1% in Q4. What is its total annual return (i.e., its compound annual growth rate or CAGR)? Give your answer in percent using two decimals (e.g., for 12.346% write 12.35).
Suppose an initial investment of $100 will remain $50/year fo r three years (assume the $50 is received each year at the end of the year). Is this a profitable investment?