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- Centrum Water & Gas provides standby power to pumping stations using diesel-powered generators. An alternative is the use of natural gas to power the generators, but it will be a few years before the gas is available at remote sites. Centrum estimates that by switching to gas, it will save $15,000 per year, starting 3 years from now through the end of year 20. At an interest rate of 8% per year, determine the present worth of the projected savings.A company which manufactures automobile wiring harnesses has budgeted 10,000,000 now to pay for a certain plastic part over the next 5 years. If the company expects to spend 2,000,000 in year 1, how much of an increase per year is the company expecting in the cost of this part? Assume the 10,000,000 is in an account earning 12% per year interest.Health informatics is making use of monitoring devices, microelectronic mechanical systems, and wireless integrated microsystems (WIMS). Monitoring of patients, alerting health professionals when a patient needs attention, and even automatically releasing drugs as needed, are becoming possible through engineering. If the cost savings in a local healthcare center is estimated to be $20,000,000 during the 7th year from now, what investment today would be justified for just that one year's savings if the time value of money is 12% per year?
- Tacozza Electric, which manufactures brush dc servo motors, budgeted $95,000 per year to pay for specific components over the next 5 years. If the company expects to spend $55,000 in year 1, how much of a uniform (arithmetic) increase each year is the company expecting in the cost of this part? Assume the company uses an interest rate of 10% per year.Frontier Airlines hedged the cost of jet fuel by purchasing options that allowed the airline to purchase fuel at a fixed price for 2 years. If the savings in fuel costs were $140,000 in month 1, $141,400 in month 2, and amounts increasing by 1% per month through the 2-year option period, what was the present worth of the savings at an interest rate of 18% per year compounded monthly?Petroleum Products, Inc. is a pipeline company that provides petroleum products to wholesalers in the Northern United States and Canada. The company is considering purchasing insertion turbine flowmeters to provide better monitoring of pipeline integrity. If these meters prevent one major disruption (through early detection of product loss) valued at $600,000 four years from now, how much could the company afford to spend now at an interest rate of 12% per year?
- A maker of micromechanical systems can reduce product recalls by 10% with the installation of new packaging equipment. If the cost of the new equipment is expected to be $40,000 four years from now, how much could the company afford to spend now (instead of 4 years from now) at a minimum attractive rate of return of 12% per year?Pollution control equipment for a pulverized coal cyclone furnace is expected to cost $190,000 two years from now and another $120,000 four years from now. If Monongahela Power wants to set aside enough money now to cover these costs, how much must be invested at an interest rate of 8% per year compounded quarterly?Costs associated with the manufacture of miniature high-sensitivity piezoresistive pressure transducers is, $73,000 per year. A clever industrial engineer found that by spending $16,000 now to reconfigure the production line and reprogram two of the robotic arms, the cost will go down to $58,000 next year and $52,000 in years 2 through 5. Using an interest rate of 10% per year, determine the present worth of the savings due to the reconfiguration. (Hint: Include the reconfiguration cost.)
- An engineer deposits $8,000 in year 4, $8,500 in year 5, and amounts increasing by $500 per year through year 10. At an interest rate of 1% per year, the equation to find the present worth in year 0 is: (a) 18000(P/A i, 7) + 500(P/G i, 7)](P/F i, 3) (b) [8000(P/A i, 7) + 500(P/G i, 7)] (P/F i, 4) (c) [8000(P/A i, 6) + 500(P/G i, 6)](P/F i, 3) (d) [8000(P/A i, 6) + 500(P/G i, 6)] (P/F i, 4)The present worth of all the cashflows of handmade earthen pots are shown until the end of year 8 is $9,330. If money is worth 12% annually, what is the value of x at then end of year 4?Metalfab Pump and Filter Inc. estimates that the cost of steel bodies for pressure valves will increase by $2 every 3 months. If the cost for the first quarter is expected to be $80, what is the present worth of the costs for a 4-year time period at an interest rate of 1.32% per quarter? The present worth is $