Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 3, Problem 46P
To determine
Calculate the present value.
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Solve the following problems:
1. In order to build a new warehouse facility, the regional distributor for Valco
Multi-Position Valves borrowed $1.6 million at 10% per year interest. If the
company repaid the loan in a lump sum amount after 2 years, what was (a) the
amount of the payment, and (b) the amount of interest?
2. A sum of $2 million now is equivalent to $2.42 million 1 year from now at what
interest rate?
3. In order to restructure some of its debt, General Motors decided to pay off one
of its short-term loans. If the company borrowed the money 1 year ago at an
interest rate of 8% per year and the total cost of repaying the loan was $82 million,
what was the amount of the original loan?
4. How many years would it take for an investment of $280,000 to cumulate to at
least $425,000 at 15% per year interest?
5. Valtro Electronic Systems, Inc. set aside a lump sum of money 4 years ago in
order to finance a plan expansion now. If the money was invested in a 10% per
year simple…
The local bank pays 4% interest on savings deposits. In a nearby town, the bank pays 1% per quarter. A man who has $3000 to deposit wonders whether the higher interest paid in the nearby town justifies driving there
What sum of money now is equivalent to $8250 two years hence, if interest is 4% per 6-month period? The answer is closest to:
Hint : 4% per 6 month means semi annual periods so the n does not equal 2 anymore !
$8,923
$7,052
$8,580
$9,651
Your boss has asked you to evaluate the economic viability of refinancing a loan on your plant's process equipment. The original loan of $400,000 was for 7 years. The
payments are monthly and the nominal interest rate on the current loan is 6% per year. As of the present time, your company has had the loan for 36 months. The new loan
would be for the current balance (i.e. the balance at the end of the 36th month on the old loan) with monthly payments at a nominal interest rate of 3% per year for 4 years.
A one-time financing fee for the new loan is $10,000. Your company's MARR is 9% per year on a nominal basis. Determine if the new loan is economically advantageous.
The present worth of the difference between the original financing plan and the new (proposed) financing plan is $
(Round to the nearest dollar.)
Chapter 3 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - Prob. 7PCh. 3 - Prob. 8PCh. 3 - Prob. 9PCh. 3 - Prob. 10P
Ch. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Prob. 13PCh. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Prob. 16PCh. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Prob. 21PCh. 3 - Prob. 22PCh. 3 - Prob. 23PCh. 3 - Prob. 24PCh. 3 - Prob. 25PCh. 3 - Prob. 26PCh. 3 - Prob. 27PCh. 3 - Prob. 28PCh. 3 - Prob. 29PCh. 3 - Prob. 30PCh. 3 - Prob. 31PCh. 3 - Prob. 32PCh. 3 - Prob. 33PCh. 3 - Prob. 34PCh. 3 - Prob. 35PCh. 3 - Prob. 36PCh. 3 - Prob. 37PCh. 3 - Prob. 38PCh. 3 - Prob. 39PCh. 3 - Prob. 40PCh. 3 - Prob. 41PCh. 3 - Prob. 42PCh. 3 - Prob. 43PCh. 3 - Prob. 44PCh. 3 - Prob. 45PCh. 3 - Prob. 46PCh. 3 - Prob. 47PCh. 3 - Prob. 48PCh. 3 - Prob. 49PCh. 3 - Prob. 50PCh. 3 - Prob. 51PCh. 3 - Prob. 52PCh. 3 - Prob. 53PCh. 3 - Prob. 54PCh. 3 - Prob. 55PCh. 3 - Prob. 56PCh. 3 - Prob. 57PCh. 3 - Prob. 58PCh. 3 - Prob. 59PCh. 3 - Prob. 60PCh. 3 - Prob. 61PCh. 3 - Prob. 62PCh. 3 - Prob. 63PCh. 3 - Prob. 64PCh. 3 - Prob. 65PCh. 3 - Prob. 66PCh. 3 - Prob. 67PCh. 3 - Prob. 68PCh. 3 - Prob. 69PCh. 3 - Prob. 70PCh. 3 - Prob. 71PCh. 3 - Prob. 72PCh. 3 - Prob. 1STCh. 3 - Prob. 2STCh. 3 - Prob. 3ST
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