Contemporary Engineering Economics (6th Edition)
Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 5, Problem 11P
To determine

Calculate the maximum amount willing to pay.

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A small mining group is considering the purchase of a continuous mining machine. If the total value of all expenses expressed in year 0 (i.e. net present value) is $8,889,024, what is the equivalent cost of the machine expressed as 7 equal payments paid in years 1-7 (i.e. "net annual value"). Assume an interest rate of 14%. Express your answer as a positive value.
For the year ending December 31, 2017, sales for Company Y were $61.21 billion. Beginning January 1, 2018 Company Y plans to invest 7.5% of their sales amount each year and they expect their sales to increase by 3% each year over the next three years. Company Y invests into an account earning an APR of 1.8% compounded continuously. Assume a continuous income stream. How much money will be in the investment account on December 31, 2020? Round your answer to three decimal places. billion dollars How much money did Company Y invest in the account between January 1, 2018 and December 31, 2020? Round your answer to three decimal places. billion dollars How much interest did Company Y earn on this investment between January 1, 2018 and December 31, 2020? Round your answer to three decimal places. If intermediate values are used, be sure to use the unrounded values to determine the answer. billion dollars
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