A 2,000 square foot house in New Jersey costs $1,725 each winter to heat with its existing oil-burning furnace. For an investment of $5,000, a natural gas furnace can be installed, and the winter heating bill is estimated to be $1,000. If the homeowner’s MARR is 6% per year, what is the discounted payback period of this proposed investment? (a) 7 years (b) 8 years (c) 9 years(d) 10 years.

You estimate your monthly gas and maintenance expenses for your delivery vehicles will be $1,500 a month for the next 7 years. Assuming an interest rate of 5%, what is the present value of these costs?

Present value with periodic rates. Sam Hinds, a local dentist, is going to remodel the dental reception area and add two new workstations. He has contacted A-Dec, and the new equipment and cabinetry will cost $20,000. The purchase will be financed with an interest rate of 8.5% loan over 10 years. What will Sam have to pay for this equipment if the loan calls for semiannual payments (2 per year) and weekly payments (52 per year)? Compare the annual cash outflows of the two payments. Why does the weekly payment plan have less total cash outflow each year? What will Sam have to pay for this equipment if the loan calls for semiannual payments (2 per year)? (Round to the nearest cent)

a college can purchase a telephone system for $35000 or lease a system for 5 years for a front-end charge and regular payments of $1500 at the beginning of every quarter (including the first quarter). The system can be purchased at the end of the lease period for $3000  a) should the college lease or buy the system if it can borrow funds at 5% compounded quarterly? b) what is the current economic value of the saving with the lower cost option?

A person who invests $1,000 each year finds one choice that is expected to pay 4 percent per year and another choice that may pay 7 percent. What is the difference in return if the investment is made for four years?

Considering an interest rate of 8%, that the cost of the equipment is $300,000 and you will replace the equipment after 7 years, what is the annual cost if the expected salvage value is $75,000?

An apartment will generate $8,000 a year for 5 years, after which you expect to sell the property for $100,000. What is the maximum you should pay for the property if your cost of money is 10% ?

Beene Distributing is considering a project that will return $150,000 annually at the end of each year for the next six years. If Beene demands an annual return of 7% and pays for the project immediately, how much is it willing to pay for the project?

If a garden center is considering the purchase of a new tractor with an initial investment cost of $117,000, and the center expects a return of $31,000 in year one, $22,000 in years two and three, $17,000 in years four and five, and $8,000 in year six and beyond, what is the payback period? fill in the blank 1 years

(Equivalent annual annuity) Rib & Wings-R-Us is considering the purchase of a new smoker oven for cooking barbecue, ribs, and wings. It is looking at two different ovens. The first is a relatively standard smoker and would cost $52,000, last for 7 years, and produce annual free cash flows of $16,000 per year. The alternative is the deluxe, award- winning Smoke-alator, which costs $78,000 and, because of its patented humidity control, produces the "moistest, tastiest barbecue in the world." The Smoke-alator would last for 15 years and produce free cash flows of $22,000 per year. Assuming a required rate of return of 10 percent on both projects, compute their equivalent annual annuities (EAAs). The EAA of the standard smoker is $ The EAA of the Smoke-alator is $ (Round to the nearest dollar.) (Round to the nearest dollar.) Rib & Wings-R-Us should purchase the (Select from the drop-down menu.)