3. The offshore design group at Bechtel just purchased upgraded CAD software for $5000 now and...
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3. The offshore design group at Bechtel just purchased upgraded CAD software for $5000 now and annual payments of $500 per year for 6 years starting 3 years from now for annual upgrades. What is the present worth in year 0 of the payments if the interest rate is 8% per year? year cash 0123456 0 -5000 0 0 -500 -500 -500 -500 7 -500 8 -500 -$6,981.69 4. Recalibration of sensitive measuring devices costs $8000 per year. If the machine will be recalibrated for each of 6 years starting 3 years after purchase, calculate the 8-year equivalent uniform series at 16% per year. Show hand and spreadsheet solution year Cash flow 0 0 1 0 2 0 3 -8000 4 -8000 in 5 -8000 6 -8000 7 -8000 00 8 -8000 5. Find the present worth in year 0 for the cash flows shown using an interest rate of 10% per year. P =? i=10% 0 2 3 4 5 6 7 8 00 A = $5000 $2000 9 6. Convert the cash flows shown below into an equivalent annual worth A in years 1 through 8 at i=10% per year. i = 10% 0. 2 3 4 5 6 7 8 A = $3000 $1000 7. John Deere expects the cost of a tractor part to increase by $5 per year beginning 4 years from now. If the cost in years 1-3 is $60, determine the present worth in year 0 of the cost through year 10 at an interest rate of 12% per year. P =? 0 2 10 2 3 Actual years Gradient years 60 60 60 65 70 G=5 95 8. Chemical engineers at a Coleman Industries plant in the Midwest have determined that a small amount of a newly available chemical additive will increase the water repellency of Coleman's tent fabric by 20%. The plant superintendent has arranged to purchase the additive through a 5-year contract at $7000 per year, starting 1 year from now. He expects the annual price to increase by 12% per year thereafter for the next 8 years. Additionally, an initial investment of $35,000 was made now to prepare a site suitable for the contractor to deliver the additive. Use i = 15% per year to determine the equivalent total present worth for all these cash flows. i-15% per year $35,000 5 6 7 8 9 10 11 12 13 Year + 9 Geometric gradiente $7000 $7840 12% increase per year $17,331 9. For the cash flows shown, find the future worth in year 7 at i= 10% per year. PG i = Actual 0 1 2 3 4 5 6 2 3 Gradient 70 65 3. The offshore design group at Bechtel just purchased upgraded CAD software for $5000 now and annual payments of $500 per year for 6 years starting 3 years from now for annual upgrades. What is the present worth in year 0 of the payments if the interest rate is 8% per year? year cash 0123456 0 -5000 0 0 -500 -500 -500 -500 7 -500 8 -500 -$6,981.69 4. Recalibration of sensitive measuring devices costs $8000 per year. If the machine will be recalibrated for each of 6 years starting 3 years after purchase, calculate the 8-year equivalent uniform series at 16% per year. Show hand and spreadsheet solution year Cash flow 0 0 1 0 2 0 3 -8000 4 -8000 in 5 -8000 6 -8000 7 -8000 00 8 -8000 5. Find the present worth in year 0 for the cash flows shown using an interest rate of 10% per year. P =? i=10% 0 2 3 4 5 6 7 8 00 A = $5000 $2000 9 6. Convert the cash flows shown below into an equivalent annual worth A in years 1 through 8 at i=10% per year. i = 10% 0. 2 3 4 5 6 7 8 A = $3000 $1000 7. John Deere expects the cost of a tractor part to increase by $5 per year beginning 4 years from now. If the cost in years 1-3 is $60, determine the present worth in year 0 of the cost through year 10 at an interest rate of 12% per year. P =? 0 2 10 2 3 Actual years Gradient years 60 60 60 65 70 G=5 95 8. Chemical engineers at a Coleman Industries plant in the Midwest have determined that a small amount of a newly available chemical additive will increase the water repellency of Coleman's tent fabric by 20%. The plant superintendent has arranged to purchase the additive through a 5-year contract at $7000 per year, starting 1 year from now. He expects the annual price to increase by 12% per year thereafter for the next 8 years. Additionally, an initial investment of $35,000 was made now to prepare a site suitable for the contractor to deliver the additive. Use i = 15% per year to determine the equivalent total present worth for all these cash flows. i-15% per year $35,000 5 6 7 8 9 10 11 12 13 Year + 9 Geometric gradiente $7000 $7840 12% increase per year $17,331 9. For the cash flows shown, find the future worth in year 7 at i= 10% per year. PG i = Actual 0 1 2 3 4 5 6 2 3 Gradient 70 65
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Related Book For
Intermediate Accounting
ISBN: 978-0470161012
9th Canadian Edition, Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
Posted Date:
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