- Consider the following cash flow:Year Cash
- Compute the rate of return for the following cash flow to within 1/2%.Year Cash Flow0.........................-$1001-10.......................+27
- Solve the following cash flow for the rate of return to within an 112%.Year Cash
- Compute the rate of return for the following cash flow.Year Cash Flow1-5.........................-$2336-10......................+1000
- Compute the rate of return for the following cash flow to within 0.5%.Year Cash
- Compute the rate of return for the following cash flow.Year Cash
- A woman went to the Beneficial Loan Company and borrowed $3000. She must pay $119.67 at the end of each month for the next 30 months.(a) Calculate the nominal annual interest rate she is paying to
- Helen is buying a $12,375 automobile with a $3000 down payment, followed by 36 monthly payments of $325 each. The down payment is' paid immediately, and the monthly payments are due at the end of
- Peter Minuet bought an island from the Manhattoes Indians in 1626 for $24 worth of glass beads and trinkets. The 1991 estimate of the value of land on this island was $12 billion. What rate of return
- A man buys a corporate bond from a bond brokerage house for $925. The bond has a face value of $1000 and pays 4% of its face value each year. If the bond will be paid off at the end of 10 years,
- A well-known industrial firm has issued $1000 bonds that carry a 4% nominal annual interest, rate paid semiannually. The bonds mature 20 years from now, at which time the industrial firm will redeem
- One aspect of obtaining a college education is the prospect of improved future earnings in comparison to non-college graduates. Sharon Shay estimates that a college education has a $28,000 equivalent
- An investor purchased a one-acre lot on the outskirts of a city for $9000 cash. Each year he paid $80 of property taxes. At the end of 4 years, he sold the lot. After deducting his selling expenses,
- A popular reader's digest offers a lifetime subscription to the magazine for $200. Such a sub sanction may be given as a gift to an infant at birth (the parents can read it in those early years), or
- On April 12, 1988, an engineer bought a $1000 bond of an American airline for $875. The bond paid 6% on its principal amount of $1000, half in each of its April 1and October 1 semiannual payments; it
- The cash price of a machine tool is $3500. The dealer is willing to accept a $1200 down payment and 24 end-of-month monthly payments of $110 each. At what effective interest rate are these terms
- A local bank makes automobile loans. It charges 4% per year in the following manner: if$3600 is borrowed to be repaid over a 3-year period, the bank interest charge is $3600 x 0.04 x 3 years = $432.
- Upon graduation, every engineer must decide whether to go on to graduate school. Estimate the costs of going full time to the university to obtain a Master of Science degree. Then estimate the
- A table saw costs $175 at a local store. You may either pay cash for it or pay $35 now and $12.64 a month for 12 months beginning 30 days hence. If you choose the time payment plan, what nominal
- An investment of $5000 in Biotech common stock proved to be very profitable. At the end of 3 years the stock was sold for $25,000. What was the rate of return on the investment?
- The Southern Guru Copper Company operates a large mine in a South American country. A National Assembly said in a speech that most of the capital for the mining operation was provided by loans from
- An insurance company is offering to sell an annuity for $20,000 cash. In return the firm will guarantee to pay the purchaser 20 annual end-of-year payments, with the first payment amounting to $1100.
- A bank proudly announces that it has changed its interest computation method to continuous compounding. Now $2000 left in the bank for 9 years will double to $4000.(a) What nominal interest rate,
- Fifteen families live in Willow Canyon. Although several water wells have been drilled, none has produced water. The residents take turns driving a water truck to a fire hydrant in a nearby town.
- Ian purchased 100 shares of Peach Computer stock for $18 per share, plus a $45 brokerage commission. Every 6 months she received a dividend from Peach of 50 cents per share. At the end of 2 years,
- An investor purchased 100 shares of Omega common stock for $9000. He held the stock for 9 years. For the first 4 years he received annual end-of-year dividends of $800. For the next 4 years he
- The Diagonal Stamp Company, which sells used postage stamps to collectors, advertises that its average price has increased from $1 to $5 in the last 5 years. Thus, management states, investors who
- You spend $1000 and in return receive two payments of $1094.60-- one at the end of 3 years and the other at the end of 6 years. Calculate the resulting rate of return.
- A mine is for sale for $240,000. It is believed the mine will produce a profit of $65,000 the first year, but the profit will decline $5000 a year after that, eventually reaching zero, whereupon the
- Fred, our cat, just won the local feline lottery to the tune of 3000 cans of "9-Lives" cat food (assorted flavors). A local grocer offers to take the 3000 cans and in return, supply Fred with 30 cans
- An apartment building in your neighborhood is for sale for $140,000. The building has four units, which are rented at $500 per month each. The tenants have long-term leases that expire in 5 years.
- A new machine can be purchased today for $300,000. The annual revenue from the machine is calculated to be $67,000, and the equipment will last 10 years. Expect the maintenance and operating costs to
- AI Larson asked a bank to lend him money on January 1, based on the following repayment plan: the first payment would be $2 on February 28, with sub-sequent monthly payments increasing by $2 a month
- The following advertisement appeared in the Wall Street Journal on Thursday, February 9, 1995. ''There's nothing quite like the Seville Smart Lease. Seville SLS $0 down, $599 a monthj36 months" first
- After 15 Years of working for one employer, you transfer to a new job. During these years your employer contributed (that is, she diverted from your salary) $1500 each year to an account for your
- A finance company is using the following "Money by Mail" offer. Calculate the yearly nominal IRR received by the company if a customer chooses the loan of $2000 and accepts the credit insurance (Life
- A finance company is using the "Money by Mail" offer shown in Problem 7-43. Calculate the yearly nominal IRR received by the company if a customer chooses the $3000 loan but declines the credit
- In his will, Frank's uncle has given Frank the choice between two alternatives:Alternative 1$2000 cashAlternative 2$150 cash now plus $100 per month for 20 months beginning the first day of next
- The owner of a comer lot wants to find a use that will yield a desirable return on his investment. After much study and calculation, the owner decides that the two best alternatives are:If the owner
- Two alternatives are as follows:If 5% is considered the minimum attractive rate of return, which alternative should be selected?
- Consider two mutually exclusive alternatives:If the minimum attractive rate of return is 10%, which alternative should be selected?
- Consider these two 7-49 mutually exclusive alternatives:At a MARR of 10%, which alternative should be selected?
- Two mutually exclusive alternatives are being considered. Both have a 10-year useful life. If the MARR is 8%, which alternative is preferred?
- Consider two mutually exclusive alternatives:If the MARR is 8%, which alternative should be selected?
- Two mutually exclusive alternatives are being considered.If the minimum attractive rate of return is 8%, which alternative should be selected? Solve the problem by(a) Present worth analysis "(b)
- A contractor is considering whether to purchase or lease a new machine for his layout site work. Purchasing a new machine will cost $12,000 with a salvage value of $1200 at the end of the machine's
- Two hazardous environment facilities are being evaluated, with the projected life of each facility being 10 years. The cash flows are as follows:The company uses a MARR of 15%. Using rate of return
- Two alternatives are being considered:If the minimum attractive rate of return is 7%, which alternative should be selected?
- Jean has decided it is time to purchase a new battery for her car. Her choices are:Jean believes the batteries can be expected to last only for the guarantee period. She does not want to invest extra
- Two alternatives are being considered:Base your computations on a MARR of 7% and an 8-year analysis period. If identical replacement is assumed, which alternative should be selected?
- Two investment opportunities are as follows:At the end of 10 years, Alt. B is not replaced. 'Thus, the comparison is 15 years of A versus 10 years of B. If the MARR is 10%, which alternative should
- Find the rate of return for the following cash flow:Year Cash
- A group of businessmen formed a partnership to buy and race an Indianapolis-type racing car. They agreed to pay an individual $50,000 for the car and associated equipment. The payment was to be in a
- A student organization, at the beginning of the fall quarter, purchased and operated a soft-drink vending machine as a means of helping finance its activities. The vending machine cost $75 and was
- Given the following cash flow, determine the rate of return on the project.Year Cash
- Given the following cash flow, determine the rate of return on the investment.Year Cash
- Given the following cash flow, determine the rate of return on the investment.Year Cash
- Compute the rate of return on the investment characterized by the following cash flow.Year Cash
- Compute the rate of return on the investment characterized by the following cash flow.Year Cash
- A firm invested $15,000in a project that appeared to have excellent potential unfortunately, a lengthy labor dispute in Year3 resulted in costs that exceeded benefits by $8000. The cash flow for the
- The following cash flow has no positive interstate. The project, which had a projected life of 5 years, was terminated early.Year Cash
- For the following cash flow, compute the rate of return.Year Cash
- Given the following cash flow:Year Cash
- Consider the 7A-13 following cash flow.Year Cash Flow0.........................-$1001............................2402...........................-143If the minimum
- Refer to the strip-mining project in Example 5-10. Compute the rate of return for the project.
- Consider the following cash flow.Year Cash
- Determine the rate of return on the investment for the following cash flow.Year Cash
- Compute the rate of return on the investment on the following cash flow.Year Cash
- Determine the rate of return on the investment on the following cash flow.Year Cash
- Bill purchased a vacation lot he saw advertised on television for an $800 down and monthly payments of $55. When he visited the lot he had purchased, he found it was not something he wanted to own.
- Compute the rate of return on an investment having the following cash flow.Year Cash
- Assume that the following cash flows are associated with a project.Year Cash
- Compute the rate of return for the following cash flow.Year Cash
- Following are the annual cost data for a tomato press.Year Cash
- A project has been in operation for 5 years, yielding the following annual cash flows:Year Cash
- Consider the following situation.Year Cash
- An investor is considering two mutually exclusive projects. He can obtain a 6% before-tax rate of return on external investments, but he requires a minimum attractive rate of return of7% for these
- In January, 2003, an investor purchased a convertible debenture bond issued by the XLA Corporation. The bond cost $1000 and paid $60 per year interest in annual payments on December 31. Under the
- A firm is considering moving its manufacturing plant from Chicago to a new location. The industrial engineering department was asked to identify the various alternatives together with the costs to
- In a particular situation, four mutually exclusive alternatives are being considered. Each of the alternatives costs $1300 and has no end-of-useful-life salvage value.If the MARR is 8%, which
- A more detailed examination of the situation in Problem 8-2 reveals that there are two additional mutually exclusive alternatives to be considered. Both cost more than the $1300 for the four original
- The owner of a downtown parking lot has employed a civil engineering consulting firm to advise him on the economic feasibility of constructing an office building on the site. Bill Samuels, a newly
- An oil company plans to purchase a piece of vacan1 land on the comer of two busy streets for $70,000. On properties of this type, the company installs businesses of four different types.*Cost of
- A firm is considering three mutually exclusive alternatives as part of a production improvement program. The alternatives are as follows:For each alternative, the salvage value at the end
- Given the following four mutually exclusive alternative, sand using 8% for the MARR, which alternative should be selected?
- Consider the following three mutually exclusive alternatives:For what range of values of MARR is Alt, C the preferred alternative Put your answer in the following form: "Alternative C is preferred
- Consider four mutually exclusive alternatives, each having an 8-year useful life:If the minimum attractive rate of return is 8%, which alternative should be selected?
- Three mutually exclusive projects are being considered:When each project reaches the end of its useful life, it would be sold for its salvage value and there would be no replacement. If 8% is the
- Consider three mutually exclusive alternatives:Which alternative should be selected?(a) If the minimum attractive rate of return equals 6%?(b) If MARR =9%?(c) If MARR = 10%?(d) If MARR = 14%?
- Consider the three alternatives:Which alternative should be selected?(a) If MARR =6%?(b) If MARR =8%?(c) If MARR = 10%?
- A firm is considering two alternatives:At the end of 4 years, another B may be purchased with the same cost, benefits, and so forth. If the MARR is 10%, which alternative should be selected?
- Consider the following alternatives: Initial cost Uniform annual benefitsEach alternative has a l0-year useful life and no salvage value. If the MARR is 8%, which alternative should be selected?
- Given the following:Over what range of values of MARR is Y the preferred alternative
- Consider four mutually exclusive alternatives:The analysis period is 8 years. At the end of 2, 4, and 6 years Alt A will have an identical replacement. Alternative B will have a single identical
- Consider the three alternatives:Each alternative has a l0-year useful life and no salvage value. Based on a MARR of 15%, which alternative should be selected? Where appropriate, use an external
- A new 10,000~square-meter warehouse next door to the Tyre Corporation is for sale for $450,000. The terms offered are $100,000 down with the balance being paid in 60 equal monthly payments based on
- Consider the following alternatives:Use present worth analysis, an 8% interest rate, and an infinite analysis period. Which alternative should be selected in each of the two following situations?1.
- A problem often discussed in the engineering economy literature is the "oil-well pump problem"} Pump 1is a small pump; Pump 2 is a larger pump that costs more, will produce slightly more oil, and
- Three mutually exclusive alternatives are being studied. If the MARR is 12%, which alternative should be selected?
- The South End bookstore has an annual profit of $170,000. The owner is considering opening a second bookstore on the north side of the campus. He can lease an existing building for 5 years with an