1) Mercruiser purchases a used recently upgraded computer numerical control (CNC) machine for turning operations. It costs $50,000, and since the machine will increase productivity, the company expects to increase sales by $7,000 per year. Maintenance costs are $1,000 per year starting 1 year after purchase. Every 5 years, the machine will require a software upgrade costing $5,000. Draw the cash flow diagram for the scenario described if Mercruiser uses a 10-year planning horizon.

2) You need to borrow $10,000, which you will pay back in 4 years. Your local bank has the following four loan accounts available: Regardless of the account chosen, you will not pay back any money until the end of the fourth year.

Account	Interest rate	Interest Type
1	7	Compounded annually
2	7.5	Simple
3	7.5	Compounded annually
4	8.25	Simple

Construct a table showing the projected loan balance (i.e., the amount you owe) for each account at the end of each of the 4 years. If your objective is to repay the least amount of money, which account do you prefer?

3) Deposits are made at the end of years 1 through 7 into an account paying 6 percent per year interest. The deposits start at $5,000 and increase by $1,000 each year. How much will be in the account immediately after the last deposit? Interest is annually compounded, 8%.