14 QUESTION 13What is the present worth of alternative A? Use an interest rate of 10%. (Round your answer to the nearest whole dollar.)AB.Initial Cost$15,000$12,000Annual Benefit$7,000$1,800Salvage valueLife (in years)$5,000$02 yearsInfinity

Answered: Image /qna-images/answer/2218a859-b2ca-4e51-87ac-156805bdc8d3.jpg

Answered: What is the present worth of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose you are offered two options: (i) receive Taka 30,000 at the end of 5 years or (ii) receive Taka P today and another Taka P 2 year later. When you invest the P Taka in ecommerce it pays around 8% profit yearly. What value of P would be same as promise of Taka 30,000 after 5 years? Assume there is no risk in this future payment.
For the following questions, choose the letter of the best answer (showing work): 2.1. How many months would you have to put $500 per month into an account that earns 4% monthlyin order to accumulate $6,000?(a) 10 months(b) 65 months(c) 15 months(d) 5 months 2.2. A machine will need to be replaced 10 years from today for $10,000. How much must be depositednow into an account that earns 5% per year to cover the replacement cost?(a) $1,486(b) $6,139(c) $10,000(d) $4,810 2.3. An effective rate of 10% per quarter is closest to what effective rate per year?(a) 40.00%(b) 46.41%(c) 10.38%(d) 16.99% 2.4. If the internal rate of return (IRR) of Alternative A is 30%, the IRR of Alternative B is 25%, andMARR is 20%, which of the following is correct?(a) Not enough information is given to determine which alternative is preferred(b) Alternative A is preferred over Alternative B(c) Alternative B is preferred over Alternative A(d) Neither Alternative A nor Alternative B is acceptable 2.5.…
Marquesa earns money and can spend money only this year and next year. Her utility isU(c1, c2) = c1c2. She can save and borrow as much as she wants at an annual interest rate of10%. If she earns $50,000 this year and $110,000 next year, what is the largest amount shecould consume next year?(a) $165,000(b) $150,000(c) $110,000(d) $82,500(e) None of the above
ou decided to go and apply for a credit card at your local financial institution.The Prime rate currently announced on June 1 was 3.25%. You have goodcredit history and a FICO score of 700. The lowest rate that they can offer toindividuals is a 18.99% APR for a credit card that gives cashback on purchasesand rewards. You were offered 21.99% APR for the credit card. How did thelender determine or calculate what rate they should offer you?
Draw cash flow as well !!
Pls help to select correct option.
Present using 1. ANNUAL WORTH METHOD 2. PAYBACK METHOD Rate of interest = 10%
Solve by using formulas. (Round your answer to the nearest cent.) Ordinary Annuity AnnuityPayment PaymentFrequency TimePeriod (years) NominalRate (%) InterestCompounded Future Valueof the Annuity (in $) $3,000 every 6 months 5 5.0 semiannually $
What is the fair value of the option? Enter number in USD
4 You need to value a MBS. The underlying mortgages have an average interest rate of 4.57%, a maturity of 6 years, and a par value of $2,000,000. The coupon rate is 3.82%. Payments are annual. There are 0.75% fees for servicing the MBS. The market rate for similar investments is 5.25%. If you were to purchase the entire MBS, how much would you pay the issuer? You don’t expect any prepayments. A. 2,265,635 B. 2,559,365 C. 2,256,369 D. 1,965,896 E. 1,909,380
Give detailed solutiin
Ve Options v (4) You want to buy a Ford SUV with a list price of $48,000. Dealer A offers to sell it for a discount price of $42,000 if you pay cash. Dealer B offers "0% financing" - you pay 4 installment payments of S12,000 starting from next year. Suppose you have a high-interest savings account that pays annual rate of 10%. Which deal is better? Show your calculation steps. (Round to two decimal places.)

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