5. Calculate the present worth of a machine which costs $74000 initially and will have a $14000 salvage value after 11 years. The operating cost is $10000 at the end of yearl and amounts increasing by 10% each year. Use an interest rate of 14% per year compounded continuously.

5. Calculate the present worth of a machine which costs $74000 initially and will have a $14000 salvage value after 11 years. The operating cost is $10000 at the end of yearl and amounts increasing by 10% each year. Use an interest rate of 14% per year compounded continuously.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Solve using below given formulas

5. Calculate the present worth of a machine which costs $74000 initially and
will have a $14000 salvage value after 11 years. The operating cost is $10000
at the end of yearl and amounts increasing by 10% each year. Use an interest rate
of 14% per year compounded continuously.
6. How much money can be withdrawn quarterly for 18 years from a retirement
fund which earns 18% per year interest compounded monthly and has a present
amount of $190000 in it?

Basic Time Value Modes
1) F-Mi+
2) P- F(I+)"
3)
4) 4-
(1+1
6) A
G[a+ -1
(1+4 (1+
(1+)-1

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