Question: Question 2 a) An electrical engineer wants to deposit an amount P now such that he can withdraw an equal annual amount of A1 =

Question 2 a) An electrical engineer wants to

Question 2 a) An electrical engineer wants to deposit an amount P now such that he can withdraw an equal annual amount of A1 = RM2000 per year for the first 5 years, starting 1 year after the deposit, and a different annual withdrawal of Az = RM3000 per year for the following 3 years. How would the cash flow diagram appear if I = 8.5% per year? b) A tunnel to transport water through the Kinabalu Mountain range initially cost RM1,000,000 and has expected maintenance costs that will occur in a 6-year cycle as shown below: End of year 1 2 3 4 5 6 Maintanance Cost (RM) 35000 35000 35000 45000 45000 60000 Find the capital cost if given at 8% interest annually. (20 Marks)

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