Jason decides to buy a Camaro for $60,000 after graduating college. Jason retires in 35 years and his Camaro is worth $5,000. Jessica decides to invest $60,000 after graduation and puts that money into retirement. The average rate of return is 6.5% per year. At 35 years, how much more money does Jessica have over Jason? Group of answer choices A. $578,735 B. $453,665 C. $543,735 D. ONE MILLION DOLLORSZ

Jason decides to buy a Camaro for $60,000 after graduating college. Jason retires in 35 years and his Camaro is worth $5,000. Jessica decides to invest $60,000 after graduation and puts that money into retirement. The average rate of return is 6.5% per year. At 35 years, how much more money does Jessica have over Jason? Group of answer choices A. $578,735 B. $453,665 C. $543,735 D. ONE MILLION DOLLORSZ

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 3E

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A certain warehouse is worth Php 1,650,000. The average value of the merchandise in the warehouse is Php 1,500,000. The annual insurance rate on the warehouse is 1% and the merchandise stored in the warehouse is 0.9%. A proposal for the installation of a fire sprinkler is being considered. The system will cost Php 80,000 and will effect a savings of 70% in both insurance premiums. Monthly maintenance is estimated to be Php 500 and annual taxes is Php 4,000 for the sprinkler system. The owners of the warehouse, demand that the investment in such equipment be written-off within 10 years. Invested capital can be expected to earn minimum return of about 17%. Would you advice the installation? (Use ROR)
(perpetuities) A man planned of building a house. The cost of construction is Php 550,000, while annual maintenance cost is estimated at Php 10,000 . If the interest rate is 7.23%, what is the capitalized cost of the house? Round your answer to 2 decimal places
What is the IRR for an investment of $X that returns $Y at the end of each year for Nyears? X=$11,040 Y=$992.25 N=41 years
Quick Computing currently sells 10 million computer chips each year at a price of $20 per chip. It is about to introduce a new chip, and it forecasts annual sales of 12 million of these improved chips at a price of $25 each. However, demand for the old chip will decrease, and sales of the old chip are expected to fall to 3 million per year. The old chips cost $6 each to manufacture, and the new ones will cost $8 each. What is the proper cash flow to use to evaluate the present value of the introduction of the new chip? Note: Enter your answer in millions.
Consider three investment plans at an annual rate of 9.38%. • Investor A: Invest $2000 per year for the first 10 years of your career. At the end of 10 years, make no further investments, but reinvest the amount accumulated at the end of 10 years for the next 31 years. • Investor B: Do nothing for the first 10 years. Then start investing $2000 per year for the next 31 years. • Investor C: Invest $2000 per year for the entire 41 years. Note that all investments are made at the beginning of each year, the first deposit will be .made at the beginning of age 25 (n=0), and you want to calculate the balance at age of 65 (n=41).
Options are: P3 P3--p2 C+E A+B+C A D+E+F F B+D A+B+C+D+E P1-P2 G+H+C+E
An electric automobile can be purchased for $25,000. The automobile is estimated to have a life of 12 years with annual mileage of20,000 miles. Every three years, a new set of batteries will have to be purchased at a cost of $3,000. The $3,000 cost of the batteries is a net value with the old batteries traded in for the new ones. Annual maintenance of the vehicle is estimated to cost $700. The cost of recharging the batteries is estimated at $0.015 per mile. The salvage value of the batteries and the vehicle at the end of 12 years is estimated at $2,000. Consider the MARR to be 7%. What is the cost per mile to own and operate this vehicle according to these estimates?
Ten years ago, Johnson Recovery purchased a wrecker for $330, 000 to move disabled 18-wheelers. He received a salvage value of $25, 000 after 10 years of use. During this 10-year period, his average annual revenue totaled $60, 000. a) Did he recover his investment at 12% per year return? In other words, does the Annual Equivalent Value of the benefits exceed the Capital Recovery cost at an interest rate of 12%? b) Suppose Johnson moves, on average, 250 disabled 18-wheelers each year. What is his average equivalent benefit/cost per vehicle moved? c) Now, incorporate annual operating and maintenance costs into your analysis. If the annual O&M cost was $5, 000 the first year and increased by a constant 10% per year, what is the annual equivalent worth at 12% per year?
A football team wants to invest in an airplane to transport the team and staff around the country. The expected life of the airplane is 20 years and its operation will cost $750,000 on an annual basis. If the manager declares that they can spend at most $4 million on a new plane, and the MARR is 6%, find the AW.
Give typing answer with explanation and conclusion A small company purchased now for $120,000 will lose $300 each year for the first four years. An additional $600 in the company in the fourth year will result in a profit of $9500 each year from the fifth through the twelfth year. At the end of 12 years, the company can be sold for $135,000. a) Draw the cash flow diagram b) Determine the IRR for this project. c) Calculate the FW if MARR is 5%. d) Calculate the ERR when ε = 7%.
Project A requires an immediate investment of $8000 and another $6000 in three years. Net returns are $4000 after two years, $12,000 after four years, and $8000 after six years. Project B requires an immediate investment of $4000, another $6000 after two years, and $4000 after four years. Net returns are $3400 per year for seven years. Determine the net present value at 10%. Which project is preferable according to the net present value criterion?
At 6% interest rate, find the capitalized cost of a building whose cost is ₱250,000,000with a life of 20 years. The building must be partially rebuilt at a cost of ₱130,000,000 atthe end of each 20 years.