If the market rate today on foreign stock investments is 12% per year and the inflation rate is 5% per year, the number of future dollars seven years in the future that will have the same purchasing power as $2000 now is closest to: O $905 O $1421 O $2810 O $4420
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- How many future dollars 10 years from now willhave the same buying power as $10,000 today?The market interest rate is 12% per year and the inflation rate is 7% per year.A small heat pump now costs $2,500 to purchase and install. It has a projected useful life of years and will incur annual maintenance costs of $75 per year in real (year-zero) dollars over the useful life. These costs are projected to increase at %4 per year, which is the expected general inflation rate. The annual cost of electricity for the heat pump is $700 in year-zero dollars. Electricity prices are projected to increase at an annual rate of %9. The firm's MARR, which includes an allowance for general price inflation, is %18 per year (im). No market value is expected from the heat pump at the end of the 12 years of service life. a. What is the PW of owning and operating the heat pump? The PW is $-------- enter your response here. (Round to the nearest dollar.)b. (i) What is the AW, expressed in actual dollars, of owning and operating the heat pump? The AW is $------- enter your response here. (Round to the nearest dollar.) (ii) What is…Well-managed companies set aside money to pay for emergencies that inevitably arise in the course of doing business. If a commercial solid waste recycling and disposal company puts 0.5% of its after-tax income into such an account, how much will the company have after 7 years, provided the company’s after-tax income averages $15.2 million per year? The inflation and market rates are 5% per year and 9% per year, respectively.
- A father wants to save in advance for his eight-year-old daughter's collegeexpenses. The daughter will enter the college 10 years from now. An annualamount of $20,000 in today's dollars (constant dollars) will be required to support her college expenses for four years. Assume that these college payments will be made at the beginning of each school year. (The first payment occurs at the end of 10 years.) The future general inflation rate is estimated to be 5% per year, and the interest rate on the savings account will be 8% compounded quarterly (market interest rate) during this period. If the father has decided to save only $500 (actual dollars) each quarter, how much will the daughter have to borrow to cover her freshman expenses?(a) $1,920(b)$2,114(c) $2,210(d)$2,377A father wants to save for his 8-year-old son’scollege expenses. The son will enter college 10 yearsfrom now. An annual amount of $40,000 in today’sconstant dollars will be required to support the son’scollege expenses for four years. Assume that thesecollege payments will be made at the beginning ofthe school year. The future general inflation rate isestimated to be 6% per year, and the market interestrate on the savings account will average 8% compounded annually. Given this information,(a) What is the amount of the son’s freshman-yearexpense in terms of actual dollars?(b) What is the equivalent single-sum amount at thepresent time for these college expenses?(c) What is the equal amount, in actual dollars, thefather must save each year until his son goes tocollegeA father wants to save for his eight-year-old son's college expenses. The son will enter college 10 years from now. An annual amount of $40,000 in constant dollars will be required to support the son's college expenses for four years. Assume that these college payments will be made at the beginning of each school year. The future general inflation rate is estimated to be 6% per year, and the market interest rate on the savings account will average 8% compounded annually.(a) What is the amount of the son's freshman-year expense in terms of actual dollars?(b) What is the equivalent single-sum amount at the present time for these college expenses?(c) What is the equal amount, in actual dollars, the father must save each year until his son goes to college?
- this is about Introduction to Decisions Under Certainty on engineering economics subject.. please show your solution. 1. At a time when the inflation rate is 6% per year, $100,000 fifteen years from now (thatis, inflated dollars) is the same as how many of today’s constant-value dollars?Given: F = $100,000 n = 15 years f = 6%Labor costs over a 4-year period have been forecast in thencurrent dollars as follows: $10,000, $12,000, $15,000, and $17,500. The general inflation rate for the 4 years is forecast to be 5%. Determine the constant-dollar labor costs for each of the 4 years.Taki deposits P50,000 in a bank account at 6% compounded monthly for 5 years. If the inflation rateis 6.5% per year continues for this period. Will this effectively protect the purchasing power of theoriginal principal?
- A# man# is# planning# to# retire# in# 20# years.# He# can# deposit# money# for# his# retirement# at# 8%# compounded# monthly.# It# is# estimated# that# the# future# general# inflation# (!)# rate# will# be# 3%# compounded#monthly.#What#deposit,#in# terms#of#constant#dollars, must#be#made#each#month#until# the#man#retires#so#that#he#can#make#annual#withdrawals#of#$20,000,#in#terms#of#actual dollars,#over# the#15#years#following#his#retirement?#(Assume#that#his#first#withdrawal#occurs#at#the#end#of#the#first# year after#his#retirement.)Assume the market interest rate is 8% per year and inflation averages 5% per year. calculate the perpetual equivalent annual worth in future dollars for years 1 through ∞ for an income of $65,000 now and $5000 per year thereafter.The Fischer-Tropsch (F-T) process was developed in Germany in 1923 to convert synthesis gas (i.e., a mixture of hydrogen and carbon monoxide) into liquid with some gaseous hydrocarbons. Interestingly, the F-T process was used in World War II to make gasoline and other fuels. The U.S. military can save one billion gallons per year of foreign oil by blending its jet fuel with F-T products. If the government expects inflation to average 3% per year, what is the equivalent uniform annual savings in fuel? The government's MARR is 7% per year, the study period is 40 years, and one gallon of jet fuel costs $2.80. The AW is $_______billion.