A design-build-operate engineering company in Texas that owns a sizable amount of land plans to lease...
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A design-build-operate engineering company in Texas that owns a sizable amount of land plans to lease the drilling rights (oil and gas only) to a mining and exploration company. The contract calls for the mining company to pay $20,000 per year for 20 years beginning 3 years from now (i.e., beginning at the end of year 3 and continuing through year 22) plus $10,000 six years from now and $15,000 sixteen years from now. Utilize engineering economy relations by hand and by spreadsheet to determine the five equivalent values listed below at 16% per year. 1. Total present worth PT in year 0 2. Future worth F in year 22 3. Annual series over all 22 years 4. Annual series over the first 10 years 5. Annual series over the last 12 years A design-build-operate engineering company in Texas that owns a sizable amount of land plans to lease the drilling rights (oil and gas only) to a mining and exploration company. The contract calls for the mining company to pay $20,000 per year for 20 years beginning 3 years from now (i.e., beginning at the end of year 3 and continuing through year 22) plus $10,000 six years from now and $15,000 sixteen years from now. Utilize engineering economy relations by hand and by spreadsheet to determine the five equivalent values listed below at 16% per year. 1. Total present worth PT in year 0 2. Future worth F in year 22 3. Annual series over all 22 years 4. Annual series over the first 10 years 5. Annual series over the last 12 years
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The question asks for the calculation of several financial measures for a lease contract using the time value of money concepts at an interest rate of 16 per year The contract involves payments of 200... View the full answer
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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