Problem 4: A cutting-edge product of Continental Fan had the following net cash flow series during its first 5-year period on the market. Find all rate of return values between 0% and 100%. Net Cash Flow, $ -44,000 32,000 24,000 12,000 -4,000 8,000 Year 1 2 3 4 5
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- ENGINEERING ECONOMICS 1. A house and lot can be acquired to a down payment of P500,000 and a yearly payment of P100,000 at the end of each year for a period of 10 years, starting at the end of 5 years from the date of purchase. If money is worth 14% cpmpounded annually, what is the cash price of the property and construct and amortization table 2. The will of a wealthy philanthropist left P 5,000,000 to establish a perpetual charitable foundation. The foundation trustees decided to spend P1,200,000 to provide facilities immediately and to provide P100,000 of capital replacement at the end of each 5-years period. If the invested funds earned 12% per annum, what would be the year end amount available in perpetuity from the endownment for charitable purposes? a) P 320, 859 c) P 690,2218 b) P 440,259 d) P 530,100! Required information The Bureau of Indian Affairs provides various services to American Indians and Alaska Natives. The Director of Indian Health Services is working with chief physicians at some of the 230 clinics nationwide to select the better of two medical X-ray system alternatives to be located at secondary-level clinics. X-Ray Systems Del Medical First cost, $ -230,000 Annual operating cost, $/year-211,000 Overhaul in year 3, $ Overhaul in year 4, $ Salvage value, $ Expected life, years -- -140,000 50,000 6 Siemens -204,000 -215,000 -26,000 -- 10,000 6 At 5% per year, select the more economical system. Solve using tabulated factors. The present worth of Del Medical is $- and the present worth of Siemens is $- The more economical system is (Click to select)Current Attempt in Progress A small manufacturer has net annual cash flows as follows over the first 4 years of business. The applicable interest rate varies from year to year. End of Year Cash Flow Interest Rate During Year 0 Present Worth -$100,000 Future Worth Click here to access the TVM Factor Table calculator. $ 1 $ $80,000 Uniform Series Annual Equivalents $ 4% 2 3 -$15,000 $70,000 6% Determine the present worth, future worth, and uniform series annual equivalents for each of the 5 flows in the series. Determine a uniform series from t=0 to t=4. 5% 4 $130,000 4%
- RLC Manufacturing is planning to purchase a cutting equipment. Information are as follows: Equipment 1 Equipment 2 First Cost P 12,000 P 18,000 Salvage Value P 600 P 2,000 Annual Operation P 3,200 P 2,500 Annual Maintenance P 1,200 P 1,000 Taxes & Insurance 3% 3% Life, years 10 15 Money is worth at least 16%. Which equipment should be selected? Use: Rate of Return MethodA company is expected to result 3000$ savings annually for the 6 years, if the rate of interest is 8% what will be the present worth? Select one: a. 13501$ O b. 13461$ O c. 13869$4. An investment generates an annual income of $200,000 with a salvage value of $2,000,000 in 10 years. If the interest rate is 10% per year, how much should one pay for it now?
- A lender engages in a 15-day $1,000,000 reverse repo at a rate of 2.50%. The haircut is 2%. The current market value of the loan is $980,000. What rate of return did the lender earn on annualized basis? Use 360-day for annualization.9. The company buys a vehicle, n=18 first cost=60000 on 1st 7th and 14th years earning from the vehicle is 12000 and other years earnings are annual equally amount of x, i=8%, what is x that reach equilibrium on the cash flow series over the life of the vehicle?Hinson’s Homegrown Farms needs a new irrigation system. System one will cost $145,000, have annual maintenance costs of $10,000, and need an overhaul at the end of year six costing $30,000. System two will have first-year maintenance costs of $5000 with increases of $500 each year thereafter. System two would not require an overhaul. Both systems will have no salvage value after 12 years. If Hinson’s cost of capital is 4%, using annual worth analysis determine the maximum Hinson’s should be willing to pay for system two.
- A bond at a price of 8000X On 23/2/2016 the company bought 12 d. Bonds with an annual interest of 12% to be paid on 1/4 and 10/1 of each year, and the bonds mature on 23/2/2026, and on 1/4/2017 400 bonds were sold at a price of 10 d. Assign cash. The bond sale will be listed on *: 4/1/2017 as follows * 4000 from h/ cash 800 from h/ losses from selling bonds 4800 to d/ long-term investments in bonds 4000 from h/ cash 712 from h/ losses from selling bonds 4712 to h/ long- term investments in bonds 80000 fromd/cash 16000 from h/ losses from selling bonds 96000 to h/ long-term investments in bonds 4712 from h / cash 4000 to h/long- term investments in bonds 712 to the extent of gains from the sale of bondsSUBJECT: ENGINEERING ECONOMICS (a) Identify the Given and the Unknown or what is being asked in the problem (b)Provide the formula to be used (c)Show the complete solution. The final answer is already provided. Thomas deposited 300,000Php now, so that his 3 year old daughter will receive 6 equal amounts of money yearly, starting on her 18th birthday. If money earns 20% compounded annually. How much the girl received yearly? Answer: A = P1,158,244.98DARPA is planning to purchase a new machine.The initial investment required for this is $60000.The machine will yield $1500 in revenue anually for 6 years while an O and M expense of $500 is required every year of the machine's life.The machine is resold for $17000 at the end of 6 years.Draw the cash flow diagram.Assume the EOP discrete cash flows.