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- 6. A bank charges an interest rate of 7%. An engineer wants to loan an amount ofFhp 1,000,000 to start his construction business from January 06, 2022 to December 30,2022. Determine the difference of future worth of ordinary simple interest and exact simpleinterest.Consider a project that will bring in upfront cash inflows for the first two yearsbut require paying some money to close the project in the third year. A0 A1 A2 $6500 $4500 $13000 This is a simple borrowing project. Determine the borrowing rate of return7. The CIT School of Engineering needs P20,000,000.00 to pay for the building renovation in 6 years. To generate this sum, a sinking fund consisting of four annual payments is established now. For tax purposes, no further payments will be made after four years. What are the necessary payments if money is worth 18% per annum? a. 1.834 M b. 2.754 M c. 3.162 M d. 4.186 M
- BOND PROBLEM: $1675 bond matures in 16.5 years. Coupon rate 3.39%. Payment made biweekly. R= 4.89%. After 5 -years coupon rate becomes 22% and payment made weekly. R=13%. What is your RATE OF RETURN over the years (ROR)?ENGINEERING ECONOMICS 1. A house and lot can be acquired to a down payment of P500,000 and a yearly payment of P100,000 at the end of each year for a period of 10 years, starting at the end of 5 years from the date of purchase. If money is worth 14% cpmpounded annually, what is the cash price of the property and construct and amortization table 2. The will of a wealthy philanthropist left P 5,000,000 to establish a perpetual charitable foundation. The foundation trustees decided to spend P1,200,000 to provide facilities immediately and to provide P100,000 of capital replacement at the end of each 5-years period. If the invested funds earned 12% per annum, what would be the year end amount available in perpetuity from the endownment for charitable purposes? a) P 320, 859 c) P 690,2218 b) P 440,259 d) P 530,1003. A company issued 50 bonds of P 1,000.00 face value each, redeemable at par at the ends of 15 years to accumulate the funds required for redemption, the firm established a sinking fund consisting of annual deposits, the interest rate of the fund being 4%. What was the principal in the fund at the end of the 12th year?
- An IOU agreement was made between two persons. For a face value of P100,000, it was agreed that the borrowerwill make 8 annual payments at a 10.50% interest rate. The first payment will be due at the end of the year. It wasalso agreed that 90% of the face value will be paid for redemption. What is the bond value if it yields at a rate of12%? Please solve using economics fomula.8 - A contractor will face negative cash flow in the construction project as shown below. This is due to the late payment of monthly progress payments by the employer and the fact that the cash guarantee is kept by the employer until the end of the project. The interest on the money that the contractor will borrow to meet this negative money flow is 2% per month. If for the month of March 45 000 p.b. instead of 15 000 p.b. How much less would he have paid in total if he had borrowed interest-bearing? January -85 000 p.b. (currency unit) February -120 000 p.b. March -45 000 p.b. April -90 000 p.b. May -63 000 p.b. June -15 000 p.b. July + 10 000 p.b. August + 408 000 p.b.A) 29 146B) 34 750C) 38 486D) 35 186E) 33 1235 Mr. H Salt purchased an 1/8 interest in a producing oil well for $45,000. Recoverable oil reserves for the well were estimated at that time at 15,000 barrels, 1/8 of which represented Mr. Salt's share of the reserves. During the subsequent year, Mr. Salt received $12000 as his 1/8 share of the gross income from the sale of 1000 barrels of oil. From this amount, he had to pay $3000 as his share of the expense of producing the oil. Compute Mr. Salt's depletion allowance for the year.
- 1. Deferred Annuity/ Shifted Series A contractor bought a concrete mixer at 120,000.00 if paid in cash. The mixer may also be purchased by installment to be paid within 5 years. If the interest rate is 8%, what is the amount of each annual payment if all payments are made at the beginning of each year?9. Your boss has just presented you with the summary (below) of project costs and annual revenues for a new product line. He asks you to determine whether this investment opportunity would be economically justifiable using PW method at MARR=10%. What will you present to your boss? Note: Signs represents the cash flow. Year Net Cash flow 0 -450,000 1 -42,500 2 92,800 3 386,000 4 614,600 5 -202,200ENGINEERING ECONOMICS 1. A company issued 50 bonds of P1000 face value each, redeemable at par at the end of 15 years. To accumulate the funds required for redemption the firm established a sinking fund consisting of annual deposits, the interest rate of the fund is 4%. What was the principal in the fund at the end of 12th year. Draw a cash flow