1. What is the future equivalent of $1,000 invested at 6% simple interest per year for 2% years? 2. A present obligation of $20,000 is to be repaid in equal uniform annual amounts, each of which includes repayment of the debt (principal) and interest on the debt, over a period of five years. If the interest rate is 10% per year, what is the amount of the annual repayment? 3. It is estimated that a copper mine will produce 10,000 tons of ore during the coming year. Production is expected to increase by 5% per year thereafter in each of the following six years. Profit per ton will be $14 for years one through seven. a. Draw a cash flow diagram for this copper mine operation from the company's viewpoint. b. If the company can earn 10% per year on its capital, what is the future equivalent of the conner mine's cash flows at the end of year seven?

1. What is the future equivalent of $1,000 invested at 6% simple interest per year for 2% years? 2. A present obligation of $20,000 is to be repaid in equal uniform annual amounts, each of which includes repayment of the debt (principal) and interest on the debt, over a period of five years. If the interest rate is 10% per year, what is the amount of the annual repayment? 3. It is estimated that a copper mine will produce 10,000 tons of ore during the coming year. Production is expected to increase by 5% per year thereafter in each of the following six years. Profit per ton will be $14 for years one through seven. a. Draw a cash flow diagram for this copper mine operation from the company's viewpoint. b. If the company can earn 10% per year on its capital, what is the future equivalent of the conner mine's cash flows at the end of year seven?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 15P

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