do question 5&6 plz N 1. what annual fog evears is equivalent to sooo at the end
ID: 1101615 • Letter: D
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do question 5&6 plz
N 1. what annual fog evears is equivalent to sooo at the end of the first spending year, if interest is at 8 $2000 the end of the fourth year, $3000at the end of the eighth and seooo annually for year, year the next five years percent per year? offered 000 per for 2. An inventor has been $12 the following seven years. At what price could he afford to sell his invention to earn percent? 10 3. A loan of $12.000 is to be financed to assist in buying an On the basis of monthly compounding for 42 months, the end of month equal payment is quoted as $445. What rate is being charged 4, Bob Pearson borrowed S25,000 from a bank at an interest rate of 10 compounded monthly, The loan will be repaid in 36 equal nts over three years. Lmmediately after his 20" payment, Bob desires to pay the remainder of the loan in a single payment Compute the total amount he must pay. Use semiannual compounding equipment had shown an 5. A standby rator was purchased 6 years ago $4200. Similar is no longer gener economic life of 15 years with a salvage of 15% of the first cost. The generator between needed and is to be sold for $1800. The interest rate is 8 what is the difference the actual and anticipated equivalent annual capital recovery coat? 5 The of a tank must be replaced every at a cost of s1800. A new type of lining is available that is more resistant to corrosion. The new lining costs If the MARR 12% and taxes and insurance of the first annually, how long must the improved lining last to be more economical than the presentExplanation / Answer
5. Initial Cost = $4,200
Salvage Cost = 15% of initial cost = 0.15*4,200 = $630
Useful life = 15 years
Depreciation for 1 year = (4200-630)/15 = $238
Book Value after 6 years = 4200 - 6*238 = $2,772
Estimated annual recovery cost = PMT(0.08,15,-4200,630) = $467.48
Actual annual recovery cost = PMT(0.08,6,-4200,1800) = $663.16
6.) Inital Cost = $1,800
Equivalent annual cost = PMT(0.12,3,-1800) = $749.43
Annual Taxes & Insurance = 4% of Initial cost = 0.04*1800 = $72
Total Annual cost = $749.43 + $72 = $821.43
New Lining
Initial Cost = $3100
Useful life be x years.
Annual Taxes & Insurance = 0.04*3100 = $124
If annual cost is less than $821.43 it is better to use new lining.
Hence Equivalent Annual Cost < $697.43
No.of years = NPER(0.12,697.43,-3100) = 6.73 years
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