1. The two cash flow diagrams shown below are said to be economically equivalent at a...

 

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1. The two cash flow diagrams shown below are said to be economically equivalent at a 10% annual interest rate. Find the unknown A value that satisfies the equivalence. $200 $200 $100 $100 $200 $200 2. What is the future worth of a series of equal deposits of $5,000 for 10 years in a savings account that carns 8% annual interest if: a. All deposits are made at the end of each year (i.e., first deposit is at the end of year 1; last deposit is at the end of year 10)? b. All deposits are made at the beginning of each year (i.c., first deposit is at the start of year 1: last deposit is at the start of year 10)? 3. The maintenance cost of a machine is expected to be $155 at the end of the first year, then increasing by $35 each year for the next 7 years. How much do we need to deposit now to pay the maintenance for the 8-year period assuming 6% interest rate. 4. In the example of question 3, we wish to know the uniform annual equivalent maintenance cost. Calculate an equivalent A for the maintenance costs. 1. The two cash flow diagrams shown below are said to be economically equivalent at a 10% annual interest rate. Find the unknown A value that satisfies the equivalence. $200 $200 $100 $100 $200 $200 2. What is the future worth of a series of equal deposits of $5,000 for 10 years in a savings account that carns 8% annual interest if: a. All deposits are made at the end of each year (i.e., first deposit is at the end of year 1; last deposit is at the end of year 10)? b. All deposits are made at the beginning of each year (i.c., first deposit is at the start of year 1: last deposit is at the start of year 10)? 3. The maintenance cost of a machine is expected to be $155 at the end of the first year, then increasing by $35 each year for the next 7 years. How much do we need to deposit now to pay the maintenance for the 8-year period assuming 6% interest rate. 4. In the example of question 3, we wish to know the uniform annual equivalent maintenance cost. Calculate an equivalent A for the maintenance costs.

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SOLUTION 1 2 3 4 Solution Given that Two cash flow diagram 200 200 0 Two Cash fl... View the full answer