Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 8, Problem 50SE
To determine

Calculate the percentage of annual saving.

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The 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?
A federal government contractor is considering buying a software package at a cost of $450,000. The software company will charge an annual maintenance fee of $25,000 payable at the beginning of each year including the very first year. The contracting company is bidding on a four-year government contract. The equivalent uniform annual cost of the software that should be included in the bid at an interest rate of 20% is ______.
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 year
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