Last month you lent a work colleague $5000 to cover some overdue bills. He agreed to pay you in 1 month with interest at 2% for the month, thus owing you $5100. Today, when the repayment is due, he asked you to extend the loan for another month and he would pay you the $5100 next month. In the meantime, you have had the offer to invest as much as you wish in an oil-well venture that is expected to pay 25% per year and a hot new IT stock that is estimated to return 30% the first year. If you let your colleague have another month, what is the opportunity cost of your decision? (Note: Express your answer in dollar and percentage amounts.)

Q: A company that manufactures high-speed submersible rotary-indexing spindles is considering an…

A: (a) The time period is indicated by ‘n’. The rate of return is indicated by ‘i’. The future worth…

Q: t and interest rate of 10% per year, the perpetual equivalent annual equivalent cost of $70000 now,…

A: Annual cost = $70000 At the end of six year the cost = $100000 From ten year the cost = $10000…

Q: Alternative A has a rate of return of 14% and alternative B has a rate of return of 17%. If the…

A: Suppose, the alternate A’s rate of return is 14% and investment requirement is small than B.…

Q: Why is an incremental analysis necessary when conducting a rate of return evaluation of cost…

A: Incremental research/analysis is a technique of decision making in company to find out the real gap…

Q: A permanent endowment at a major university is established to award scholarships to engineering…

A: Given,Scholarship starts from the 11th year,Scholarship amount (Per year) = 19000×100 =1900000Final…

Q: Ellis Equipment sold a used Massey Ferguson tractor for $55,000 to a South Kansas farmer 10 years…

A: The money interest rate can be any declared or given interest rate. The payback period is that…

Q: When positive net cash flows are generated before the end of a project, and when these cash flows…

A: Cash inflows can be reinvested to generate a rate of return higher than the internal rate of return.

Q: A small construction company has $190,000 set aside in a capital improvement fund to purchase new…

A: The actual rate of return can be calculated as follows: Actual rate of…

Q: A reservoir will initially cost P200M, have P1M in annual maintenance costs, and P5M in minor…

A: Initial cost is the amount of revenue needed to build or renovate a significant institution.…

Q: Consider the cash flow below. Calculate the rate of return for an investment of 1000 T

A: The rate of return for the given cashflows is 5.40%

Q: company must relocate one of its factories in three years. Equipment for the loading dock is being…

A: original cost = P 220 000 salvage value of the equipment after three years = P8000

Q: What is meant by the term equal service alternative?

A: The equal service alternative refers to the projects that have the same life time.

Q: Your firm is considering which of two devices to install to reduce costs and has asked you to…

A: For the Device A: Useful life = 5 years Cost = $21000 Annual savings = $7500 Salvage value = $2000…

Q: What is the present worth difference between an investment of $10,000 per year for 50 years and an…

A: The present worth of the future sum of money can be calculated with the help of the following…

Q: A piece of new equipment has been proposed by engineers to increase the productivity of a certain…

A: Investment cost = $2500000 Salvage value = $50000 Per year revenue = $500000 Time period = 15 years…

Q: Plan A requires a $30,000 investment now. Plan B requires an $28,700 investment now and an…

A: Given that,   Plan A requires an investment of $30,000. Plan B requires an investment of $28.700…

Q: Lesco Chemical is considering two processes for making a cationic polymer. Process A has a first…

A: here we calculate the AOC of the both investment and choose the best one so here calculation as…

Q: tment on your part. He promises you revenue (before expenses) of $1,800 per year, and increasing by…

A: * SOLUTION :-

Q: Adams Manufacturing spent $30,000 on a new sterilization conveyor belt, which resulted in a cost…

A: Manufacturing expense (p) is $30,000 per year. Saving (s) is $4,202 per year. Interest rate is 8…

Q: A municipal bond with a face value of $10,000 was issued today with an interest rate of 6% per year…

A: Face value (FV) is $10,000. The interest rate (i) is 6%. Interest payment is semiannual. Thus, the…

Q: Find the capitalized cost of a present cost of $350,000, annual costs of $35,000, and periodic costs…

A: A capitalized cost is an expense added to the cost basis of a fixed asset on a company's balance…

Q: A young couple planning ahead for their retirement has decided that $3 million is the amount they…

A: Time period is indicated by ‘n’. ROR is indicated by ‘i’. Time period 1, n1 is 5. The annual worth…

Q: As an entrepreneur originally from Malaysia, you are interested in expanding your business to…

A: If we convert the investment amount for both the countries then for Australia it turns out to be…

Q: An engineer has been offered an investment opportunity that will require an immediate cash outlay of…

A:

Q: Darnell Enterprises constructed an addition to its building at a cost of $70,000. Extra annual…

A: Net cash flow can be calculated as follows:

Q: A $4,000 face value coupon bond with a $200 coupon payment every year has a coupon rate of:

A: The advantage obtained from a decent or service to a person or firm is measured by its amount. The…

Q: If alternative A has i * A = 10% and alternative B has i * B = 18% per year, what is known about the…

A: a. The rate of return for alternative A is 10% and alternative B is 18%. The investment for…

Q: The process for producing a fruit-tree pesticide has a first cost of $200,000 (initial investment at…

A: To find the discounted payback period firstly we compute the net cash flows taking into…

Q: Wall's Pharmacy will have to sell a new product that has an estimated revenue of $4,800 per month…

A: Given Data,  Estimated revenue = $4800 per month.  Cost = $1800 per month.  Initial purchase= 28000…

Q: The incremental rate of return method allows for the evaluation of each increment of increased…

A: The incremental internal rate of return is a calculation of a financial return to an investor or…

Q: A company must relocate one of its factories in three years. Equipment for the loading dock is being…

A: original cost (C0) = 20,000 salvage value (Cn) = 8000 Rate of return (i) = 10% =0.10 Number of years…

Q: A small construction company has $100,000 set aside in a capital improvement fund to purchase new…

A: The actual rate of return can be calculated as follows:

Q: A food processing company is considering two types of moisture analyzers. Only one can be selected.…

A: The MARR is the shortened form of the Minimum Accepted Rate of Return of the project or the…

Q: Alternative A has a rate of return of 14% and alternative B has a rate of return of 1796. If the…

A: The incremental rate if return refers to the discount rate that is used to make analysis of the…

Q: An investment of $60,000 ten years ago resulted in uniform income of $10,000 per year for the…

A: The rate of return on investment can be calculated by the following formula :  R= Net ProfitCost of…

Q: Because of international competition, a company that manufactures high-speed submersible rotary…

A: Given; Company can invest= $80000 After one year:- FV=-80000(F/P,i,n)+20000+20000(F/A,i,n)…

Q: The MARR is 7% per year, capital investment is $118,864, annual expense is $30,127, annual revenue…

A: To calculate Annual Worth we first calculate the present value.   Present value = Net cash…

Q: An equipment costing $57,500 is being considered for a production process at Dew Chemicals. The…

A: (Q)Equipment costing $57,500 is being considered for a production process at Dew Chemicals. The…

Q: A total of $50,000 was allocated to a project to detect and reduce insider theft in the ZipCar auto…

A: Total money allocated = $50000 Given ROR = 15%

Q: As a prospective business owner in the waste management business, you have researched the waste…

A: Amount financed for ARSLAN and Hidro max truck can be calculated as follows: For ARSLAN truck 10%,

Q: The supervisor ofa community swimming pool has developed two methods for chlorinating the pool. If…

A: We are going to use Present Value concept to answer this question.

Q: The three elements namely incremental cash flow series, LCM, and multiple roots-are considered…

A: False In engineering economy, through using the analysis of the three elements to evaluate…

Q: You have been asked to analyze the bids for 200 polished disks used in solar panels. These bids have…

A: Import tax refers to a specific type of tax that is imposed by domestic nations on goods that are…

Q: Wall’s Pharmacy will have to sell a new product that has an estimated revenue of $5,100 per month…

A:

Q: A small minority firm TheGlobalTrans invested $100,000 for an intersection signal innovation…

A: For the calculation for bimonthly income,  we need to divide the rate of interest by 6 and multiply…

Q: The capitalized cost of $ 10,000 , every 5 years forever, starting now at an interest rate of 10%…

A: here we calculate the Capitalized Cost=EUAC(M) by using the formula which are as follow-

Q: a profitabilty index (PI) of 1.45 indcates the project generates S0.45 of internal rate of return…

A: The profitability index is defined as a measure of the attractiveness of a project or investment. It…

Q: What is the future value of $4500 per year for 10 years invested at 5%? *   a. $56,600 b. $7,330 c.…

A: An annuity is the fixed amount of money invested at each time period.  The time period could be…

Q: AEC purchased an equipment for its manufacturing plant that costs PHP 3, 750 000 + PHP 10,000 x…

A: When the machine's life is measured in hours, this method is useful. The hourly rate is calculated…