7. A company is looking to reduce their general and overhead expenses by $5,000

Question

7. A company is looking to reduce their general and overhead expenses by $5,000 for each year for the next 5 years. Their current annual general and overhead expenses are $50,000 per year. If the company's annual interest rate is assumed to be 10% er year, what is the present worth of their costs? a.S110,125 b. $223,849 c. $189,540 d. $155,231 8. A woman deposited $10,000 into an account at her credit union. The money was left on deposit for 10 years. During the first 5 years the woman earned 3% simple interest annually. The credit union changed their interest policy during the 6 year where all accounts were to earn 3% interest compounded annually. How much was the account worth at the end of the 10 year? a. S13,332 b.$13,000 c. S13,440 d. $14,940 9. Find: The present value of a series of uniform future payments a. P- A(P/A, i, n) b. A F(A/F, i, n) c. PF(P/F, i, n) d, F A(F/A, i, n)

Explanation / Answer

Question 7

Present worth of costs =50000+45000/1.1+40000/1.1^2+35000/1.1^3+30000/1.1^4+25000/1.1^5 = 189,540 (Option C)

Question 8:

Interest for first 5 years = 0.03*10000*5 = 1,500

Value at the end of 5 years = 11,500

Now this will earn 3% compound interest = 11,500*1.03^5 = 13,332 (option A)

Question 9

P = F(P/F,i,n) ( Option C)

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.