Question: S.A. Ver is planning on saving $500 per month each month for the next five years in order to by a car. She is

S.A. Ver is planning on saving $500 per month each month for the next five years in order to by a car. She is You are considering an investment in equipment for your firm. The equipment costs $500,000. It has a

S.A. Ver is planning on saving $500 per month each month for the next five years in order to by a car. She is considering investing in the money market at one of three banks. Dollar Funding Bank is offering a 5.0% rate compounded semi-annually. Bitty Bank is offering a 5.0% rate compounded monthly. MedBank is offering a 5.0% rate compounded Quarterly. In which bank S.A. invest? Why? How much will S.A. have with each bank at the end of five years if she invested in each bank? Dollar Funding Bank: Bitty Bank: MedBank Bank: You are considering an investment in equipment for your firm. The equipment costs $500,000. It has a depreciable life of ten years at which time the equipment will still be able to produce product, and you estimate that your firm will save $47,500 per year in spoilage if you make the change to the new equipment. Assuming there is no cost to swap out the equipment should you make the purchase? Why or why not?

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