The maintenance on a machine is expected to be $1,500 at the end of four years. This amount is expected to increase by $100 each year for the next five years. What sum of money must be set aside now to pay the maintenance for this whole period? Use 5% interest. Draw a cash flow diagram and do a manual solution.

Q: If a production machine costs $18,000, and we are able to set up the following payment arrangements…

A: Present value of cash flows = Cash flow year1 ( 1 + interest ) +  Cash flow year2 ( 1 + interest ) +…

Q: Park Co. is considering an investment that requires immediate payment of $27,000 and provides…

A: Present value of $1 annuity = Annuity x ((1-(1+i)^-n)/i)

Q: What is the present value of end-of-year cash flows of $1,000 per year, with the first cash flow…

A: Present value (PV) is the worth of amount today that is expected to be received in future at…

Q: Annual maintenance for a machine are P 1,500.00 this year and are estimated to increase 10% each…

A: Working note for a, b and c as follows:

Q: You receive $100 today, $200 in one year, and $300 in two years. If you deposit these cash flows…

A: Formula FV = CF0*(1+R)3+CF1*(1+R)2+CF2*(1+R)1 Where FV - Value of account after 3 years R - Interest…

Q: What amount of money invested today at 15 % interest can provide the following scholoarships: Php…

A: Given, R= 15% A1= PHP 30,000 N1= 6 A2= PHP 40,000 N2= 6 A3= PHP 50,000

Q: An instructor plans to retire in exactly one year and want an account that will pay him P25,000 a…

A: The instructor is planning to retire in one year and wants to get P25000 each year for 15 years. The…

Q: You buy a new piece of equipment for $16,230, and you receive a cash inflow of $2,500 per year for…

A: The internal rate of return (IRR) is the interest rate received for investment with payments and…

Q: The maintenance on a machine is expected to be $1,500 at the end of three years. This amount is…

A: present value is the value of future cashflow discounted to present day.

Q: You buy a new piece of equipment for $11,778, and receive a cash inflow of $2,000 per year for 10…

A: Initial Investment is $11,778 Cash Inflow per year = $2,000 Time Period = 10 Years

Q: A new engineer wants to save up P1,000,000. He will contribute P5,000 annually to an investment…

A: Introduction:- The devotion of an asset to achieve a gain in value through time is referred to as an…

Q: Calculate the equivalent future amount in year 4 that a company is paying for the dozer at 4 % per…

A: The future value of the company is determined as the estimated present value that is compounding…

Q: A loan of P30,000 is to be repaid monthly for 5 years that will start at the end of 4 years. If…

A: An annuity refers to the payment made at a specific interval of time during a given time period.…

Q: Starting at the end of this year, you plan to make annual deposits of $7,000 for the next 10 years…

A: MS-Excel --> Formulas --> Financials --> FV

Q: Homework/ An electrical engineer wants to deposit an amount P now such that she can withdraw an…

A: Investment is way to spend your money to get the required return out of it in a certain period of…

Q: If a copy center is considering the purchase of a new copy machine with an initial investment cost…

A: Payback period is a amount of time it takes to recover the investment. In other words it is a time…

Q: What is the present value of a perpetual stream of cash flows that pays $2,500 at the end of year…

A: Perpetuity is a stream of identical cash flows with no end. It is a type of payment that is both…

Q: A business sets up a sinking fund so they will have a $49,000.00 to pay for a replacement piece of…

A: The PMT function or concept can be used to determine the periodic payments required to accumulate a…

Q: A new D8 will cost you $600,000.  You estimate maintenance to be $14,000 at the end of each year…

A: Annual cost of investment is equivalent annual cost of initial investment, annual maintenance,…

Q: The Hunters are trying to save $8000 as the down payment on a new recreational vehicle. If they can…

A: Given: Future value = $8,000 Monthly deposit = $200 Interest rate = 4%

Q: Dr. Anderson plans to make a series of gradient-type withdrawals from her savings account over a…

A: Withdrawals start at end of year 2 Interest Rate = 9% First Withdrawal = 50,000 Annual Increase =…

Q: The company is considering investing $810,000 in equipment. They expect the equipment to save…

A: Formulas: Payback period = cash out flows / Cash inflows

Q: cashflow diagram.

A: The cash flow statement represents the inflow and outflow of cash from the company in a particular…

Q: A project that costs $2,600 to install will provide annual cash flows of $610 for the next 5 years.…

A: The provided information are: Cost of project = $2600 Annual cash flow = $ 610

Q: Annual maintenance costs for a machine are ₱25,000 for six years. Interest rate is 6%. If…

A: Present value (PV), if the stated rates of return are provided, is the current value of a future…

Q: Southwestern Moving and Storage wants to have enough money to purchase a new tractor-trailer in 3…

A: Here, Cost of Tractor in three years (FV) is $450,000 Time Period (n) is 3 years Interest rate (r)…

Q: Tiger Trucking Company is considering a project that will produce cash inflows of $18,000 at the end…

A: Given Information: Cash inflows at the end of Year 1 - $18,000 Cash inflows at the end of Year 2 -…

Q: Two years ago, the Fun Center deposited $3,200 in an investment account for the purpose of buying…

A: given,r = 6.85% A-2= $3200 A0= $5000 A1= $3500

Q: Find the present worth of a future payment of 100,000 to be made in 10 years with an interest of 12%…

A: The concept of TVM states that money inherently has an interest-earning capacity which makes an…

Q: An investment costs $465 and is expected to produce cash flows of $100 at the endof each of the next…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: A civil engineer wants to deposit an amount P now such that she can withdraw an equal annual amount…

A: Annuity is the stream of recurring cashflow. present value of annuity formula: PVA=A×1-1+R-NR…

Q: If payback period is 5 years and the yearly cash inflows is $250 million, then the net initial…

A: The payback period refers to how long it takes to recover an investment's cost. An investment's…

Q: A company expects to receive the following cash flows $2,000 for the first ten years and then $3,000…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: An electrical engineer wants to deposit an amount P now such that she can withdraw an equal annual…

A: A1 = 2000 per year N = Time Period = 5 years End of year deposits A2 = 3000 per year Time Period = 3…

Q: A series of cash flows starts at $1,000 at the end of the first year and increases each year for the…

A: Future value of cash flow includes the deposit and plus interest accumulated over the period of…

Q: Company B plans to finance a project that will require an 5-year cleanup period. If it borrows $5…

A: Initial Investment “PV” = $5,000,000 Number of years “n” = 5 Interest rate “r” = 10% compounded…

Q: Suppose that P400 is deposited each year into a bank account that pays 8% interest annually. If 12…

A: Future value of annuity is regular deposit of fixed sum into a bank account, that will give certain…

Q: If you want to withdraw $35,000 at the end of four years, how much should you deposit now in an…

A: Cash flow diagram is a graphical representation of cash flow series over a period of time. It shows…

Q: Find the IRR for an investment

A: IRR or internal rate of return of an investment can be defined as the discount rate at which the net…

Q: Park Co. is considering an investment that requires immediate payment of $27,000 and provides…

A: Payback period: Payback period is the length of time in which an investment reaches its break-even…

Q: What is the present value of end-of-year cash flows of 1000 per year, with the first cash flow…

A: Present value is the sum of discounted future cashflow

Q: You borrow $10,000 from a bank for three years at an annual interest rate of 12% compounded…

A: Loan (L) = $10000 Interest rate = 12% compounded semiannually Duration = 3 years = 36 months We need…

Q: Dr. Anderson plans to make a series of gradient-type withdrawals from her savings account over a…

A: Withdrawals start at end of year 2 Interest Rate = 9% First Withdrawal = 50,000 Annual Increase =…

Q: An investment project provides cash inflows of $3,000 per year for five years. What is the payback…

A: Pay back period is the time period in which the project will pay back the initial investment with…

Q: Hadji wants to find the equivalent annual cash flow for 9 years with interest rate of 15% compounded…

A: Year 1 payment (P1) = $2800 Every payment after this increases by $120 n = 9 years r = 15% Let A =…

Q: You plan to deposit $100 at the end of every quarter (3 months) for 10 years starting at the end of…

A: given, quaterly deposit = $100 number of years = 10 annual rate = 6% withdrawal year = 20

Q: Mr. Holzman estimates that the maintenance cost of a new car will be 3,750 the first year, and will…

A: Maintenance cost in year 1 (M1) = 3750 M2 = 6250 M3 = 8750 M4= 11250 M5 = 13750 M6 = 16250 r = 5.5%…

Q: Second Hand Software needs to accumulate $12,000 in 3 years to meet future needs. What sinking fund…

A: Sinking fund is defined as the method of the funds repayment, which borrows by the bond issue by the…