ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 56P
To determine
The effective annual interest rate and interest rate with the help of Present Value Interest Factor of an Annuity.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A concrete pavement on a street would cost 10,000 and wouldlast for 5 years with negligible repairs. At the end of each 5years, 1,000 would be spent to remove the old surface before10,000 is spent again to lay a new surface. Find the capitalizedcost of the pavement at 5%.
The initial cost of a project is $40,000. The operating costs of this investment in year 1 is $ 2,000 which increases by 5% each year thereafter .Given the interest rate is 6% , determine the year in which the geometric increase ends.
a) between 10 and 13 years
b) between 13 and 16 years
c) Non of the answers is correct
d) between 22 and 25 years
e) between 25 and 28 years .
True or false
1) For the concept of equivalence in cash lows in engineering economics, different payment options evaluated at a specific rate of interest.
True or false
2) Cash flows cannot be added or subtracted when they occur at the same point in time.
Chapter 7 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 7 - Prob. 1QTCCh. 7 - Prob. 2QTCCh. 7 - Prob. 3QTCCh. 7 - Prob. 4QTCCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Prob. 6P
Ch. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10PCh. 7 - Prob. 11PCh. 7 - Prob. 12PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - Prob. 15PCh. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Prob. 20PCh. 7 - Prob. 21PCh. 7 - Prob. 22PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 25PCh. 7 - Prob. 27PCh. 7 - Prob. 28PCh. 7 - Prob. 29PCh. 7 - Prob. 30PCh. 7 - Prob. 31PCh. 7 - Prob. 32PCh. 7 - Prob. 33PCh. 7 - Prob. 34PCh. 7 - Prob. 35PCh. 7 - Prob. 36PCh. 7 - Prob. 37PCh. 7 - Prob. 38PCh. 7 - Prob. 39PCh. 7 - Prob. 40PCh. 7 - Prob. 41PCh. 7 - Prob. 42PCh. 7 - Prob. 43PCh. 7 - Prob. 44PCh. 7 - Prob. 45PCh. 7 - Prob. 46PCh. 7 - Prob. 47PCh. 7 - Prob. 49PCh. 7 - Prob. 50PCh. 7 - Prob. 51PCh. 7 - Prob. 52PCh. 7 - Prob. 53PCh. 7 - Prob. 54PCh. 7 - Prob. 55PCh. 7 - Prob. 56PCh. 7 - Prob. 57PCh. 7 - Prob. 58PCh. 7 - Prob. 59PCh. 7 - Prob. 60PCh. 7 - Prob. 61PCh. 7 - Prob. 62PCh. 7 - Prob. 63PCh. 7 - Prob. 64PCh. 7 - Prob. 65PCh. 7 - Prob. 66PCh. 7 - Prob. 67PCh. 7 - Prob. 68PCh. 7 - Prob. 69PCh. 7 - Prob. 70PCh. 7 - Prob. 71PCh. 7 - Prob. 72PCh. 7 - Prob. 73PCh. 7 - Prob. 74PCh. 7 - Prob. 75PCh. 7 - Prob. 76PCh. 7 - Prob. 77PCh. 7 - Prob. 78PCh. 7 - Prob. 79PCh. 7 - Prob. 80PCh. 7 - Prob. 81PCh. 7 - Prob. 82PCh. 7 - Prob. 83PCh. 7 - Prob. 84PCh. 7 - Prob. 85PCh. 7 - Prob. 87PCh. 7 - Prob. 88PCh. 7 - Prob. 89P
Knowledge Booster
Similar questions
- A bank deposit of P4,000 was made one year ago in one of the local banks which pays monthly interest. The bank account accumulates now to P4,392.60. Compute the effective annual interest rate.arrow_forwardTwo year ago, you acquired a 10 year $1000 par value bond at 12% YTM. Recently you sold this bond at 8% YTM. Using semi-annual compounding, compute the annualised horizon return for this investmentarrow_forwardA specialized automatic machine costs $270,000 and is expected to save $105,358.21 per year while in operation. Using a 9% interest rate, what is the discounted payback period?arrow_forward
- engineering economy (multiple choice) 2.) What is the accumulated value of a payment of P12,500.00 at the end of each year for 9 years with interest at 5% compounded annually? a.) P187,833.50 b.) P178,338.50 c.) P138,738.05 d.) P137,832.05arrow_forwardENGINEERING ECONOMICS Bawal Gumamit ng Excel( Don't use Excel) A small company purchased now for 1.15M will lose 75,000 each year for the first 4 years. An additional P400,000 invested in the company during the 4th year will result in a profit of 27,500 from the 5th year through the 15th year. At the end of 15 years, the company can be sold for 1.65M.a. Determine the IRR.b. Calculate FW if MARR is 12%/year.c. Calculate ERR ϵ = 12% per year.arrow_forwardm mmm. m Given the cash flows in table below, determine the rate of return. Year Cash Flow 0 $10K 1 $0 2 $5K 3 $0 4 $10K Group of answer choices Cannot determine 100% 8.91% 7.6% 4.9% 11.2% Flag question: Question 8arrow_forward
- Your friend withdrew $630,315 from an account into which she had invested $350,000. If the account paid interest at 4% per year, she kept her money in the account for how many years? (a) 1.8 years (b) 6.5 years (c) 12.5 years (d) 15 yearsarrow_forwardMrs. Cruz who is just 30 years old is planning for her retired life. She plans to invest an equal sum of P 7000 at the end of every year for the next 30 years starting from the end of next year. The bank gives 11% interest rate, compounded annually. Find the value of his account when he is 60 years old. a. P 60, 856.55 b. P 578,907.45 c. P 90, 896.67 d. P 1, 393,146.15arrow_forwardThe will of a wealthy philanthropist left 5M to establish a perpetual charitable foundation. The foundation trustees decided to spend 1.2M to provide facilities immediately and to provide 100,000.00 of capital replacement at the end of each 5-year period. If the invested funds earned 12% per annum, what would be the year-end amount available in perpetuity from the endowment for charitable purposearrow_forward
- The LMNT Company deposited P100 000 in a bank account on May 15 and withdrew a total of P115 000 exactly one year later. Compute: (a) the interest which the LMNT Company received from the P100 000 investment, and (b) the annual interest rate which the LMNT Company was paid.arrow_forwardA loan of P50T whose interest is 15% compounded semiannually, is to be discharged by a series of 10 semiannual payments, the 1st payment to be made 6 months after consummation of the loan. The 1st 6 payments will be P5T each, while the remaining 4 payments will be equal & of such amount that the final payment will liquidate the loan. What is the PV of the 1st 6 payments?arrow_forwardAre the following cash flow diagrams economically equivalent if the interest rate is 8% per year? The left-hand diagram's discounted value at the EOY 0 is __ Marrow_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:PEARSON
Engineering 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 Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial 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