Engineering Economy, Student Value Edition (17th Edition)
17th Edition
ISBN: 9780134838137
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 25P
To determine
Calculate the present value.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
"You invest $75 immediately for 9 years. The inflation rate is 5.1%. At the end of 9 years, you receive $230.78 in actual (year-9) dollars. What is the inflation-free internal rate of return? Enter your answer as a percentage rounded to the nearest tenth of a percent."
A man desires to have P3M money in his savings when he retires after 25 years. This has amount in the present purchasing power. If the expected average inflation rate is 7% per year and the savings earns 5.5%, what lump sum of money should he invest now?
If inflation averages 2.5% each year from 2015 to 2025, what is the purchasing power in 2015 dollars of $75,000 in 2025
Chapter 8 Solutions
Engineering Economy, Student Value Edition (17th Edition)
Ch. 8 - The seasonal energy efficiency ratio (SEER) is 13...Ch. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10P
Ch. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - A commercial building design cost 89/square-foot...Ch. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Your company manufactures circuit boards and other...Ch. 8 - Prob. 45PCh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49SECh. 8 - Prob. 50SECh. 8 - Prob. 51SECh. 8 - Prob. 52CSCh. 8 - Suppose the cost of electricity is expected to...Ch. 8 - Prob. 54CSCh. 8 - Prob. 55FECh. 8 - Prob. 56FECh. 8 - Prob. 57FECh. 8 - Prob. 58FECh. 8 - Prob. 59FECh. 8 - Prob. 60FECh. 8 - Prob. 61FE
Knowledge Booster
Similar questions
- You are trying to estimate the real interest rate for the mining industry products and proceed as follows. You consider buying coal and gold in equal proportion, spending $1000 on coal, and another $1000 on gold in today's dollars. In 4 years from now, the selling values in actual dollars are predicted to be $1,270 (coal) and $1,210 (gold). Inflation (for coal) is 1.1% per year, for the next 4 years. For gold, the gold price index is predicted to rise in the next 4 years from the current 417 points to 431 points. Compute the estimated real interest rate, as a number, with 0.001 precision. Hint: Calculate real interest rate for the cash flow: 1) invest now $1000+$1000; 2) sell in 4 years coal and gold and obtain appropriate cash flow.arrow_forwardA barrel of oil has a current cost of $100/barrel. If general inflation is 2.5%/ year and oil has a real escalation rate of 5%/year, what will a barrel of oil cost in actual dollars five years from now?arrow_forwardA mutual fund investment is expected to earn 11% per year for the next 25 years. If inflation will average 3% per year during this 25-year period of time, what is the compounded value (in today’s dollars) of this savings vehicle when $10,000 is invested now?arrow_forward
- Today (year 0) a new 7-megaWatt (MW) solar panel farm is constructed at a cost of $14 million. Four years from today, a smaller 6-MW solar farm will be added to the existing farm. The inflation rate on solar panel construction projects averages 8% per year. If the cost-capacity factor is 0.85 for solar panel construction, what is the estimated capital investment for the smaller 6-MW solar farm?arrow_forwardA man wishes to set aside money for his retirement at the age 65 in a fund which will have an amount equivalent to P60k with today’s purchasing power. The estimated inflation rate is 7.5%. If the fund will earn 8% compounded annually what amount should he invest now on his 40th birthday?arrow_forwardHealth care costs are reportedly rising at an annual rate that is triple the general inflation rate. The current inflation rate is running at 4% per year. In 10 years, how much greater will health care costs be compared with a service/commodity that increases at exactly the 4% general inflation rate?arrow_forward
- A small scale mining investment is expected to generate $60,000 per year in profits over the next 15 years. If these profits are invested in a mutual fund account that earns a market interest rate of 18% per year, calculate how much the fund will be worth after the 15 years in actual dollars and in real dollars. Inflation is expected to average 6% per year over that period. Click the icon to view the interest and annuity table for discrete compounding when i = 6% per year. Click the icon to view the interest and annuity table for discrete compounding when i = 18% per year. In actual dollars: OA. $2,118,010 B. $6,625,790 OC. $3,657,920 OD. $1,526,320 In real dollars: OA. $6,625,790 B. $2,118,010 OC. $1,526,320 OD. $3,657,920arrow_forwardYour department is budgeting miscellaneous expenses for the next 5 years. Your best guess at the annual inflation rate is 3.9% and the combined MARR is 15%. Expenses currently run $14,500 per year. Assume that expenses are end-of-year payments. Solve, a. Determine the then-current dollar amounts for years 1, 2, 3, 4, and 5. b. Determine the constant-dollar amount for years 1, 2, 3, 4, and 5. c. Determine the PW of the then-current-dollar amounts. d. Determine the PW of the constant dollar amounts.arrow_forwardThe purchase of a car requires a $25,000 loan tobe repaid in monthly installments for four years at 9%interest compounded monthly. If the general inflationrate is 4% compounded monthly, find the actual- andconstant-dollar value of the 20th paymentarrow_forward
- Because retail supermarket corporations operate on a low ROR, it is common to use a market MARR of about 3% per year. What real return rate is implied from a market interest rate of 3% per year when the annual inflation rate is 4% per year? Explain your answerarrow_forwardA renewable energy industry is one of the promising sectors in future and play a major role in the vision 2030. If a specialized company in energy planning to upgrade their equipment now to meet future demand at cost of $200,000 or they purchase the upgrade package three years from now at cost of $300,000. Assume that the minimum attractive rate of return is 12% per year and the inflation is 3% per year. If the company decided to purchase the upgrade 3 years from now considering inflation what will be the cost?arrow_forwardA renewable energy industry is one of the promising sectors in future and play a major role in the vision 2030. If a specialized company in energy planning to upgrade their equipment now to meet future demand at cost of $200.000 or they purchase the upgrade package three years from now at cost of $300,000. Assume that the minimum attractive rate of return is 12% per year and the inflation is 3% per year. If the company decided to purchase the upgrade 3 years from now without considering inflation what will be the cost?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education