Anita(empressPayne_Week 3 IA_Student

10. Leon will receive $20,000 annually at the end of each year from a trust that was set up by his family. The payments will last for 10 years. Inflation averages 6% and Leon's real MARR is 8%. (a) Draw a cash flow diagram of current cash flows and calculate the present worth. (4 marks) (b) Draw a cash flow diagram of real cash flows and calculate the present worth. (4 marks)

Inflation Rate (n) 15.0% 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% U 1,000 2,000 3,000 4.000 5,000 real GDP will equal 6,000 7,000 8,000 9,000 LRAS Real GDP (Y) 10,000 3 11,000 12,000 13,000 14,000 15,000 16,000 17,000 Moreover, the cyclical unemployment will equal AD SRAS Forget about the previous question. Short Run and Consider the graph above. It is also in the files folder under the name the Long Run. The graph pertains to a hypothetical country. The central bank in this country (also called the Fed) follows an inflation targeting policy. The current target inflation rate in 8 percent. The natural rate of unemployment is 5 percent and Okun's alpha is 8. units, equal to potential. 18,000 A pandemic comes and many people decide to retire out of fear of infection. This causes the labor force to decrease. As a result, LRAS shifts to the left by 2,000 units. In the short run, many people might confuse this with a recession. However, in the short…

(i) (ii) (iii) Given a consumer price index of 154.5 in the year 2019 and 165.3 in 2020, calculate the rate of inflation in 2020. The average price of a car was £35,650 in 2019. Calculate the revised price in 2020 based on the rate of inflation calculated in part (i). Assume that in 2019 Robert has invested £2000 in a bank account, which pays an annual interest rate of 6%. After a year has passed, he is paid £120 in interest. Explain whether Robert is now better off than he was the year before based on your answer in part (i).

Please show equations used. No excel please.

3. A man deposits P50,000 in a bank account at 6% compounded monthly for 5 years. If the inflation rate of 6.5% per year continues for this period, will this effectively protect the purchasing power of the original principal?

calculate Net Present value and Annual worth using the cash flow diagram below. inflation corrected interest rate is 5.08%        Note:- please dont use pen paper

If the inflation rate is higher than the interest rate, thena. it is no longer possible to earn any amount from an initial capital.b. only if the inflation is within the same period where interest is less, the investor will not earn.c. the amount invested at present time will be equal to the future amount.d. any annual worth computed at any period n (of N total years) will not be equal to the annual worth at n + 1period.

1. A businessman deposited P 15, 000 in the bank for 5 years. How much can be withdrawn if the interest is charged at 12% per year simple interest?  2. Dr. Malabago borrows P100,000 from a loan firm with a rate of simple interest of 15%, but the interest was deducted from the loan at the time the money was borrowed. At the end of one year he has to pay back P100,000. What is the actual rate of interest?

If the inflation rate is higher than the interest rate, then   A. it is no longer possible to earn any amount from an initial capital. B. only if the inflation is within the same period where interest is less, the investor will not earn. C. the amount invested at present time will be equal to the future amount. D. any annual worth computed at any period n (of N total years) will not be equal to the annual worth at n+1 period. E. None of these

Assume a market basket includes three avocados, two loaves of bread, two dozen eggs, and a seasoning packet. Item Price base year ($) Price current year ($) Avocado (per each) 1.25 1.50 Bread (per loaf) 2.99 3.19 Eggs (per dozen) 4.00 4.50 Seasoning (per packet) 1.50 1.25 According to the table shown, what is the change in the price level between the base year and the current year?  Please type out the correct answer ASAP with proper explanation thank you

True or False 1. Inflation is the real reason why our country cannot just print more bills or produce money to pay our debts.2. A deferred annuity until n period of i interest, and A equal payments, can be compensated by paying A times[F/A, i%, n + 1] on the n +1 period.

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Please answer it without Excel , And also don't use AI. Try handwritten solution or typed

Engineering Eco

E C € Question 5 Goods Good A Show answer choices Good B 15 Assuming that weights for Good A and Good B are 3 and 2 respectively, the CPI for Year 2 is A) 120 (8) 72 60 Price in Year 1 (D) 100 10 Price in Year 2 12 18 0/2 m

! Required information Consider the following factors. 1. (F/P,19%,34) 2. (A/G,23%,45) Find the numerical values of the factors using linear interpolation. The numerical value of factor 1 is The numerical value of factor 2 is

Arithmetic Gradients 4- Assume an 8% interest rate and find S, T, and X. 52 1800 A 800 1200 600 400 600 200 0-1-2–3- 0-1- (a) S = value at t = 0 (b) T = uniform value for 5 periods 600 450 300 150 (c) X = value at t = 0

subject: engineering economicsPLEASE PROVIDE A COMPLETE SOLUTION AND CASH FLOW DIAGRAM.A newspaper reports that in the last 5 years, prices have increased a total of 60%. This is equivalent to what annual inflation rate, compounded annually?

ASAP An investment of $200,000 is required to expand a certain production facility in a manufacturing company. The firm estimates that labor costs will be $150,000 for the first year but will increase at the rate of 8% over the previous year’s expenditure. Material costs, on the other hand, will be $400,000 for the first year but will increase at the rate of 10% per year due to inflation. If the firm’s inflation-free interest rate (i′) is 20% and the average general inflation rate (f) is expected to be 15% over the next 5 years, determine the total present equivalent operating expenses (with no tax consideration) for the project.   Please show step by step answer.

2. What is inflation? How will this affect the economic analysis of engineering projects?

Ben purchase a single bond note which has a face value of R20,000 and a coupon rate of 7.5%. The bond matures in 10 years and the rate of inflation is expected to be 4.5% per year over this period. His minimum acceptable rate of return (MARR) is 7% (use this value as the discount rate).A. Draw the timeline showing the nominal cash flows over the next 10 years.B. Calculate the inflation index for each year over the whole period (start with 1.0 at Year 0).C. Calculate the real cash flows for each year and show these on the timelineD. Calculate the NPV of all the nominal cash flows using MARRE. Calculate the MARR in real terms (adjusted for inflation)F. Calculate the NPV of all the real cash flows using the answer for E (inflation-adjusted MARR)G. Lastly, calculate the IRR for the real cashflows

5. Funding the nest egg shortfall Determining Retirement Shortfall Yuan and Alex have 40 years to retirement. They are taking a personal finance course and have calculated their projected retirement income and investment needs. Based on their calculations and taking into account their Social Security and pension incomes, they have a projected shortfall of $6,750.00 per year. Use the following tables to answer the questions about future value interest factors. Interest Factors-Future Value Interest Factors-Future Value of an Annuity Periods 3.00% 5.00% 6.00% 8.00% 9.00% 5.600 1.810 2.090 3.386 4.290 2.653 3.210 4.661 6.848 8.620 2.420 4.322 5.740 10.062 13.260 20.410 2.810 5.516 7.690 14.785 20 25 30 35 40 3.260 7.040 10 280 21 724 31 410 = The impact of the inflation factor Continuing their worksheet, they consult a friend, economics professor Dr. Wu, who believes that they can expect the average annual inflation rate to be 5%, possibly 6% tops. Complete the following table by…

A machine cost $2,550 on January 1, 2014, and $3,930 on January 1, 2018. The average inflation rate over these four years was 7% per year. What is the true percentage increase in the cost of the machine from 2014 to 2018? (a) 14.95% (b) 54.12% (c) 7.00% (d) 17.58% (e) 35.11%.