Engineering Economy (16th Edition) - Standalone book
16th Edition
ISBN: 9780133439274
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 11P
To determine
Calculate the present value.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
An Oman multinational company is buying an asset from a Britain company for 1 million GBP and the payment to be made after 3 months. The company expects the Pound to go up in the future by the time deal is completed. So it decides to purchase an option at OMR 0.5187/GBP with a 7% premium. The actual rate after 3 months was found to be OMR 0.5391/GBP.
What will be the profit made by the company on the execution of the option after 3 months?
a.
10400
b.
20400
c.
11128
d.
12581
e.
All the options are wrong
Clear my choice
A large automobile manufacturer has developed a continuous variable transmission (CVT) that provides smooth shifting and enhances fuel efficiency by 2 mpg of gasoline. The extra cost of a CVT is $800 on the sticker price of a new car. For a particular model averaging 28 miles per gallon with the CVT, what is the cost of gasoline (dollars per gallon) that makes this option affordable when the buyer’s interest rate is 10% per year? The car will be driven 100,000 miles uniformly over an eight-year period.
The chairman of Heller Industries told a meeting of financial analysts that he expects the firm’s earnings and dividends to double over the next three years. The firm's current (that is, as of year 0) earnings and dividends per share are $3 and $1.5, respectively.(1) Estimate the compound annual dividend growth rate over the 3-year period.(2) Forecast Heller’s earnings and dividends per share for each of the next three years, assuming that they grow at the rate determined in Part (1).(3) Assuming that earnings and dividends per share of Heller Industries common stock grow at the rate determined in Part (1) for the next three years and then at 5 percent thereafter, what’s the price of that sock? (The investors’ required rate of return is 13%)
Chapter 5 Solutions
Engineering Economy (16th Edition) - Standalone book
Ch. 5.A - Use the ERR method with = 8% per year to solve for...Ch. 5.A - Apply the ERR method with = 12% per year to the...Ch. 5.A - Are there multiple IRRs for the following...Ch. 5.A - Are there multiple IRRs for the following cash...Ch. 5 - Tennessee Tool Works (TTW) is considering...Ch. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - A large induced-draft fan is needed for an...
Ch. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - Prob. 10PCh. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Determine the FW of the following engineering...Ch. 5 - Prob. 22PCh. 5 - Fill in Table P5-23 below when P = 10,000, S = 2,...Ch. 5 - Prob. 24PCh. 5 - A simple, direct space heating system is currently...Ch. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Stan Moneymaker has been informed of a major...Ch. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 37PCh. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - To purchase a used automobile, you borrow 10,000...Ch. 5 - Your boss has just presented you with the summary...Ch. 5 - Experts agree that the IRR of a college education...Ch. 5 - A company has the opportunity to take over a...Ch. 5 - The prospective exploration for oil in the outer...Ch. 5 - Prob. 49PCh. 5 - An integrated, combined cycle power plant produces...Ch. 5 - A computer call center is going to replace all of...Ch. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - Prob. 55PCh. 5 - Prob. 56PCh. 5 - Prob. 57PCh. 5 - Prob. 58PCh. 5 - Prob. 59PCh. 5 - a. Calculate the IRR for each of the three...Ch. 5 - Prob. 61PCh. 5 - Prob. 62PCh. 5 - Prob. 63PCh. 5 - Prob. 64SECh. 5 - Prob. 65SECh. 5 - Prob. 66SECh. 5 - A certain medical device will result in an...Ch. 5 - Refer to Problem 5-61. Develop a spreadsheet to...Ch. 5 - Prob. 69CSCh. 5 - Prob. 70CSCh. 5 - Suppose that the average utilization of the CVD...Ch. 5 - Prob. 72FECh. 5 - Prob. 73FECh. 5 - Prob. 74FECh. 5 - Prob. 75FECh. 5 - Prob. 76FECh. 5 - Prob. 77FECh. 5 - Prob. 78FECh. 5 - Prob. 79FECh. 5 - A new machine was bought for 9,000 with life of...Ch. 5 - Prob. 81FECh. 5 - Prob. 82FECh. 5 - Prob. 83FECh. 5 - Refer to Problem 5-2. Assuming the residual value...
Knowledge Booster
Similar questions
- Charlene plans to place an annual savings amount of A =$27,185 into a retirement program at the end of each year for 20 years starting next year. She expects to retire and start to draw a total of R =$60,000 per year one year after the twentieth deposit. Assume an effective earning rate of i =6% per year on the retirement investments and a long life. Determine and comment on the sensitivity of the size of the annual withdrawal R for variations in A and i a. Variation of ± 5% in the annual deposit A. b. Variation of ± 1% in the effective earning rate i, that is, ranging from 5% to 7% per yeararrow_forwardA student plans to deposit P1,500 in the bank now and another P3,000 for the next two years. If he plans to withdraw P5,000 three years from after his last deposit for the purpose of buying shoes, what will be the amount of money left in the bank after one year of his withdrawal? The effective annual rate of interest is 10%.arrow_forwardSmith, a U.S. citizen, has been working as an executive of a telecommunication company in U.S., and her annual salary in 2021 was US$220,000. Her salary was expected to remain unchanged if she continued to work in the company. At the end of the year 2021, however, she was recruited by a media company in Brazil, so she started working in Brazil from January 2022, making an annual salary of US$280,000. Assuming that the amount of her salary equals the amount of her contribution to the production in the company she works for, how much the annual U.S. GDP and GNP in 2022 was changed due to her job relocation?arrow_forward
- What lump sum amount of interest will be paid on a P1,000,000 loan that was made on August 1, 1993, and repaid on November 1, 1999, with ordinary simple interest at 12% per year?arrow_forwardIf P25,000 is invested now, P35,000 two years from now, and P45,000 four years from now (all at 4%), what will be the total amount in ten years?arrow_forwardThe gaming commission is introducing a new lottery game called Infinite Progresso. The winner of the Infinite Progresso jackpot will receive $600 at the end of January, $1,600 at the end of February, $2,600 at the end of March, and so on up to $11,600 at the end of December. At the beginning of the next year, the sequence repeats starting at $600 in January and ending at $11,600 in December. This annual sequence of payments repeats indefinitely. If the gaming commission expects to sell a minimum of 1,150,000 tickets, what is the minimum price they can charge for the tickets to break even, assuming the commission earns 3.00% /per/year/month on its investments and there is exactly one winning ticket?arrow_forward
- During a recession, the price of goods and services goes down because of low demand. A company that makes Ethernet adapters is planning to expand its production facility at a cost of $1,000,000 one year from now. However, a contractor who needs work has offered to do the job for $790,000 if the company will do the expansion now instead of 1 year from now. If the interest rate is 15% per year, how much of a discount is the company getting? The answer is $79,565. ALL I NEED IS A SOLUTION TO THE PROBLEM. THANK YOUarrow_forwardA businessman is faced with the prospect of fluctuating future budget for the maintenance of the generator. During the first 5 years, P1,000 per year will be budgeted. During the second five years, the annual budget will be P1,500 per year. In addition, P3,500 will be budgeted for an overhaul of the machine at the end of the fourth year and another P3,500 for an overhaul at the end of 8th year. Assuming compound interest at 6% per annum, what is the equivalent annual cost of maintenance?arrow_forwardA firm that manufactures freezer for delivery vans currently has excess capacity. The firm expects that it will exhaust its excess capacity in three years. At that time it will have to invest P2,500,000 to build new capacity. Suppose that the firm can accept additional work as a subcontractor for another company. By doing so, the firm will receive a net cash inflow of P150,000 immediately and in each of the next three years. However, the firm will have to begin expansion two years earlier than originally planned to bring new capacity on line. Assume a discount rate of 12%. a. What is the NPV if the firm accepts the subcontractor job? b. What is the minimum amount that should be received from the subcontractor job for the company to accept it?arrow_forward
- Recently, an Internet service provider (ISP) in the United Kingdom implemented a “no-strings U.S.-style flat-rate plan” whereby its commercial subscribers can send and receive unlimited volume (measured in gigabytes) up to a cap of 10,000 gigabytes (per month) via their broadband Internet service for a flat monthly fee of £399.99. Under the old “metered plan,” Alistair Willoughby Cook sent and received a grand total of 3,500 gigabytes over his broadband connection and paid £399.99 in usage fees in a typical 30-day month. If all customers are exactly like Alistair, what is the impact of the flatrate plan on consumer welfare and the company’s profits? Explain.arrow_forwardSuppose that annual income from a rental property is expected to start at $1,300 per year and decrease at a uniform amount of $50 each year after the first year for the 15-year expected life of the property. The investment cost is $8,000, and i is 9% per year. Is this a good investment? Assume that the investment occurs at time zero (now) and that the annual income is first received at EOY one.arrow_forwarda law firm has contracted their client to make the following payment, based on the following schedule of payments; P10,000 immediately, P1,000 at the end of year one, P1,500 at the end of year two, P2,000 at the end of year three, P2,500 at the end of year four, and P3,000 at the end of year five. what fixed amount of money should the company plan to set aside each year at 8% per year compounded annually to make the payments? show your complete solution.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education