ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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An investment broker that Ava trusts recommended that she purchase a $50,0 00, 15-year municipal bond that generates a dividend of 4% per year payable quarterly. She will pay a discounted amount of $45,000 now for the bond. In general, Ava hopes to make 8 % per year compounded quarterly on her investments. Using the PW value, determine if this is a financially advantageous investment for her. Solve with factors. The present worth is
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- Nonearrow_forwardCharlie has $12,000 to invest for a period of 5 years. The following three alternatives are available to him: Account 1 pays 4.00% for year 1, 5.00% for year 2, 8.00% for year 3, 9.00% for year 4, and 12.00% for year 5, all with annual compounding. • Account 2 pays 12.00% for year 1, 9.00% for year 2, 8.00% for year 3,5.00% for year 4, and 4.00% for year 5, all with annual compounding. Account 3 pays interest at the rate of 7.56183% per year for all 5 years. Based on the available balance at the end of year 5, which alternative is Charlie's best choice? Year 5 Balance, Alternative 1: $ Year 5 Balance, Alternative 2: $ Year 5 Balance, Alternative 3: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is £5.arrow_forwardA fund is to be donated by wealthy man to provide scholarships to deserving students. The fund will grant Php 6482 for each semiannual of the first five years, Php 9808 for each quarter of the next five years, and P 11300 each month thereafter. The scholarship will start one semiannual after the fund is established. If the fund earns 8% per year compounded bimonthly, what is the amount of the donation?arrow_forward
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- A large automobile manufacturer has developed a continuous variable transmission (CVT) that provides smooth shifting and enhances fuel efficiency by 3 mpg of gasoline. The extra cost of a CVT is $700 on the sticker price of a new car. For a particular model averaging 25 miles per gallon with the CVT, what is the cost of gasoline (dollars per gallon) that makes this option affordable when the buyer's interest rate is 8% per year? The car will be driven 90,000 miles uniformly over an eight-year period.arrow_forwardPlease provide a clear and complete solution. Answer fast for I have 30 minutes left. Thank you very much.arrow_forwardA $10,000 bond has an interest rate of 6% per year payable quarterly. The bond matures 15 years from now. At a nominal interest rate of 8% per year, compounded quarterly, the present worth of the bond is represented by which of the equations below: PW = 150(P/A, 2%, 60) + 10,000(P/F, 2%, 60) PW = 600(P/A, 2%, 60) + 10,000(P/F, 2%, 60) PW = 600(P/A, 8%, 15) + 10,000(P/F, 8%, 15) PW = 150(P/A, 1.5%, 60) + 10,000(P/F, 1.5%, 60)arrow_forward
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