4-59. A transport company sets aside funds to maintainits trucks. It anticipates spending $3,000 on repairs inEOY 1, $2,000 in EOY 2, and $1,000 for the next 3 years.The interest rate is 10% per year. (4.10)a. What is the value of expenses if the interest rate is 0%?b. What is the present equivalent of the repair expensesat time 0?blirc. What is the annual equivalent expense during yearsban.gouella1-5?

In this we have to present value of expenses using interest rate and given period.

Answered: its trucks. It anticipates s EOY 1,…

its trucks. It anticipates s EOY 1, $2,000 in EOY 2, a The interest rate is 10% per a. What is the value of exp b. What is the present equ at time 0? row c. What is the annual equ 1-5?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

4-59. A transport company sets aside funds to maintain
its trucks. It anticipates spending $3,000 on repairs in
EOY 1, $2,000 in EOY 2, and $1,000 for the next 3 years.
The interest rate is 10% per year. (4.10)
a. What is the value of expenses if the interest rate is 0%?
b. What is the present equivalent of the repair expenses
at time 0?
blir
c. What is the annual equivalent expense during years
ban.gouella
1-5?

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