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SUBJECT:
Show the complete solution. The final answer is already provided.
Q3. Edeas signed a contract to lease a building at P60,000 a year with an annual increase of P1,000 a year for 5 years. Payments are to be made at the end of each year, starting one year from now. If money is worth 8%, what lump sum paid today is equivalent to the 5-year lease-payment plan?
Answer: P=246,935.03
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- SUBJECT: ENGINEERING ECONOMICS Show the complete solution. The final answer is given below. Q3. Eideas signed a contract to lease a building at P60,000 a year with an annual increase of P1,000 a year for 5 years. Payments are to be made at the end of each year, starting one year from now. If money is worth 8%, what lump sum paid today is equivalent to the 5-year lease-payment plan? Answer: P=246,935.032.5. An electric cooperative is considering the use of a concrete electric pole in the expansion of its power distribution lines. A concrete pole costs P18,000 each end will last 20 years. The company is presently using creosoted wooden poles which cost P12,000 per pole and will last 10 years. If money is worth 12 per cent, which pole should be used. Assume annual taxes amount to 1 per cent of first cost and zero salvage value in both caseslet's say you have a project that has an initial investment of $3 million and annual after-tax cash flows of $1 million for 5 years. at the end of the project, you can sell the project for a profit but your net after tax proceeds are actually negative $1.066 million due to environmental clean-up costs. what is the irr? round to nearest percentage then no decimal places and use the % symbol.....8% would be the form of a correct answer.
- A contract has been signed to lease a building at P20,000 per year with an annual increase of P1,500 for 8 years.Payments ate to be made at the end of each year, starting one year from now the prevailing interest rate is 7%. What lump sum paid today would be equivalent to the 8 year lease payment plan? (show solutions using a. equation of value and b. gradient formula)n Project A Project B 0 -$7,000 -$5,000 1 -$2,500 -$2,000 2 -$2,000 -$2,000 3 -$1,500 -$2,000 4 -$1,500 -$2,000 5 -$1,500 -$2,000 6 -$1,500 -$2,000 7 - -$2,000 8 - - Suppose projects A and B are mutually exclusive. The required service period is 8 years and comparable equipment will be leased for $3,000 per year payable at the end of each year for the remaining years of the required service period. Which project is a better choice at 15%? Use PW(15%) criterion and show your equation with numbers plugged into factors and your numerical result for each option.A man is considering putting up his own enterprise, where an investment of 800,000Php will be required and will take 15 years to recoup . He estimates his annual sales at 800,000Php along with the following operating costs. Materials ............................. 160,000Php/ yearLabor ............................. 280,000Php/ yearOverhead ............................. (40,000 + 10% of sales) Php/ yearSelling Expense............................. 60,000Php/ yearThe man will give up his regular job paying 216,000 Php per year and devote all his time to the operation of his business, this will result in decreasing his labor cost by 40,000Php per year, material cost by 28,000Php per year and overhead cost by 32,000 Php per year. If the man expects to earn at least 20% of his capital, should he invest? solve in the present worth cost method
- Can you help me with this question A business is expected to generate income at a continuous rate of $25,000 per year for the next eight years. Money can earn 3.4% annual interest, compounded continuously. The business is for sale for $153,000. Is this a good deal? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.A man is considering putting up his own enterprise, where an investment of 800,000 will be required and will take 15 years to recoup. He estimates his annual sales at 800,000 along with the following operating costs. Materials =160,000/ yearLabor = 280,000/ yearOverhead = (40,000 + 10% of sales)/ yearSelling Expense = 60,000/ yearThe man will give up his regular job paying 216,000 Php per year and devote all his time to the operation of his business, this will result in decreasing his labor cost by 40,000 per year, material cost by 28,000 per year and overhead cost by 32,000 per year. If the man expects to earn at least 20% of his capital, should he invest? Solve using a) Rate of return method b) annual worth method c)present worth method d)equivalent uniform annual cost methodTen 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?
- Mr. Don is the director of A-Design Inc., a federally incorporatedcompany in Canada, specializing in the design and manufacturing of armrests for the wheelchair industry. A-Design invested $100,000 in a production machine, which has a useful life of 10 years, and put $10,000 in its bank account. In an attempt to improve company sales and profits, Mr. Don planned tooffer two purchasing options to the clients of his company. Option 1:$250 deposit upfront$500 yearly fee for 5 years Option 2:$1300 deposit upfront$300 yearly fee for 3 years Calculate the depreciated cost per year of the machine.Use Excel to solve this problemAn elevator company has redesigned their product to be 50% more energy efficient thanhydraulic designs. Two designs are being considered for implementation in a newbuilding.A water supply system is being considered for a small district. The system requires an initial investment of P8M, will operate for 15 years and will be sold for P0.4M after that time. Annual operations and maintenance costs is expected to be P48 000.00 for the first year and is expected to increase by P12 000.00 each year thereafter. Determine the annual cost of this project using i= 11%. (Ans. - P1,210,425.43)-PLEASE USE AN ACTUAL FORMULA NOT EXCEL