14.46. Well-managed companies set aside money to pay for emergencies that inevitably arise in the course of doing business. A commercial solid-waste recycling and disposal company in Mexico City puts 0.10% of its income after-tax income into such an account. (a) How much will the company have after 7 years if after-tax income averages $16.4 million per year and inflation and market interest rates are 4% per year and 9% per year, respectively? (b) What will be the buying power of that amount in today's dollars if the inflation rate is 4% per year?

Find the present worth of earthmoving equipment that has a first cost today of $145,000, an annual operating cost of $60,000, and a salvage value of 20% of the first cost after 5 years, these estimates being in future dollars. Assume that the real interest rate is 12% per year and that inflation has averaged 7% per year. Solve with inflation (a) not accounted for and (b) accounted for. a) The present worth with inflation not accounted for is $ b) The present worth with inflation accounted for is $

2. An independent contractor is trying to decide whether to lease new equipment now or save his money and purchase it in 5 years' time when he is able to fully pay for the equipment without interest. The cost of the equipment is $73,000 if leased or $85,000 if purchased 5 years from now. At a real MARR of 10% per year and an inflation rate of 4% per year, determine if the company should lease it now or wait and purchase later (a) without any adjustment for inflation and (b) with inflation considered.

Required information To retire at a decent age and move to Hawaii, an engineer plans to trust her account to an investment firm that promises to make a real ROR of 10% per year, after commissions and fees. Inflation has a historic rate of 4% per year and the account balance is currently $490,000. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. To retire in 13 years with no further deposits, determine the account balance in (future) dollars to realize a real 10% per year return. The account balance in (future) dollars to realize a real 10% per year return is $