Engineering Econ HW2 Q3 3. A firm paid $160,000 for a building site two years ago. It is now worth $180,000, and the firm'splans have changed so that no building is planned. The firm estimates that the land will beworth $240,000 in four years. If the firm's interest rate is 8%, what should it do? Should it sellthe building now or in four years?

To determine whether the firm should sell the building site now or in four years, we need to compare…

Answered: 3. A firm paid $160,000 for a building…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter17: Financial Markets

Section: Chapter Questions

Problem 5SCQ: Investors sometimes fear that a high-risk investment is especially likely to have low returns. Is...

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Question 4 Part C: You have decided to invest in a project to build and run a production line for a friend. Your friend has specified that the production line needs to last forever, and will always be operational. The associated costs for the project are shown in the table below. How much should you charge your friend now for the production line in order to build and maintain the perpetual project? Interest rate is 6%. Costs Initial Cost Annual Operating & Maintenance Costs Year incurred Year O Major Maintenance Costs Amount $175,000 $10,000 $80,000 Question 4 Part C: What is the equation used to find the portion of the cost due to the Annual Cost (annual operating and maintenance costs)? Per year, forever First in year 5, then every 5 years forever P = 10,000/0.06 OP=10,000/0.06 +80,000(P/A, 0.06, 5) OP=10,000(P/F, 0.06, 1) + 80,000(P/A, 0.06, 10)
It refers to an annual decrease in value of physical properties with passage of time and use O A. Annuity O B. Depreciation O C. Stock O D. Bond
Find the present value of a future value of $420 at 5.5% annual simple interest for 2 years? O a. $398.10 O b. $377.35 O c. $375.73 d. $378.38 Previous page Next page 耳 P Type here to search
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Which building will you buy, Alzahra or Alrawda real state? Alzahra real state has a first cost of 10,000,000 SAR, and generate a yearly income of 200,000 SAR and SALVAGE Value of 5,000,000 SAR after 10 year Alrawda real state has a first cost of 8,000,000 SAR, and generate a yearly income of 150,000 SAR and SALVAGE Value of 3,000,000 SAR after 10 year MARR is 3% per year
11 May '20 Monday Wk: 20 O We e that eire going to pait $25 OD into at a Tate in the arcount on account of 12%. If we when we the eatns nte rest want to have $ 4000 close it, how long should we Keep monty in the acount if: ) kie compound interest contineously. ) He compound interest 6 tinies a year bikle have 40% acid solution and we want 75 itres of watr shouild acid? a i5% acid sohitiona Ho w mych we put into the 40% solution of i) GiNen f(x)= 3x-2 elnd foo) = +Y, evalyEite and State the Telationship betwaen i fogle) JUNE 2020 MTW T FS SMTWT FS S 1 2 3 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Astrid makes an investment with a zero net present value. She pays $900 today, and receives $400 one year from today, $350 two years from today, and three years from today. There are no other cash flows, and her effective annual interest rate is 12%. Select one: a. $390 b. $420 c. $410 d. $350 e. $370
4A Find the value of °C' in the figure below. Take the interest rate as 15%. C-? 21 23 Yeaurs a0,000 2SK 35K 28,000 40K 45K
Investors sometimes fear that a high-risk investment is especially likely to have low returns. Is this fear true? Does a high risk mean the return must be low?
It refers to a series of equal payments occurring at equal periods of time. O A. Annuity O B. interest O C. Cost O D. Salvage value
QUESTION 3 A firm is deciding whether or not to invest in a new piece of machinery. The equipment would cost $1000, and it would increase cash flows by $400 for the next three years. If the cost of capital is 5% then the net present value of the investment is -87.61 -89.29 87.61 89.29

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