Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 13, Problem 18P
To determine
Calculate the total value of investment.
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Suppose that a new machine tool having a useful life
of only one year costs $80,000. Suppose, also, that
the net additional revenue resulting from buying this
tool is expected to be $92,000. The expected rate of
return on this tool is
Calculate the net present value of each of the three hypothetical projects described below. Assume the interest rate
is 5%
Project A: You receive an immediate payoff of $1,000
Project B: You pay $100 today in order to receive $1,200 a year from now
Project C: You receive $1,200 today but must pay $20o one year from now
a. Which of the three projects would you choose to undertake based on your net present value calculations?
Explain.
If you wish to earn 10 percent more from your Microsoft shares next year, how much should you add to your current investment of 8.10, with an average annual rate of 5.80 percent?
Chapter 13 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Prob. 10P
Ch. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22PCh. 13 - Prob. 23PCh. 13 - Prob. 24PCh. 13 - Prob. 25PCh. 13 - Prob. 1STCh. 13 - Prob. 2STCh. 13 - Prob. 3STCh. 13 - Prob. 4ST
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