Question 3. Solve using excel! $20,607 O $15,876 O $17,665 UESTION 3 Maintenance

Question

Question 3. Solve using excel! $20,607 O $15,876 O $17,665 UESTION 3 Maintenance money for a new building has been sought. Mr. Kendall would like to make a donation to cover all future expected maintenance cost for the building. These maintenance costs are expected to be $50,000 each year for the first 5 years, $70,000 each year for years 6-10, and $90,000 each year after that. The building has an indefinite service life-How much should be put into a account that will pay 13% interest to pay the maintenance over its infinite life? $513,438 O $432,990 $786,988 $1,114,375 25 points UESTION 4 A machine is purchased for $100 nnn and can he snid at the and of fiue veare for $20 000 The machine is ranahla nf nrndiuninn 1250 narte nar vaar and the operating and n Click Save and Submit to save and submit. Click Save All Answers to save all answers. O $25.44

Explanation / Answer

Year Cash Flow PV @ 13% Present Value 1 $50,000 0.884955752 $44,247.79 2 $50,000 0.783146683 $39,157.33 3 $50,000 0.693050162 $34,652.51 4 $50,000 0.613318728 $30,665.94 5 $50,000 0.542759936 $27,138 6 $70,000 0.480318527 $33,622.3 7 $70,000 0.425060644 $29,754.25 8 $70,000 0.376159862 $26,331.19 9 $70,000 0.332884833 $23,301.94 10 $70,000 0.294588348 $20,621.18 11 year onwards infinite = $90,000/13% $692,307.69 0.294588348 $203,945.78 Total $513,438.2

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