If Dr. Superhook uses IRR to evaluate its opportunities, under what values of the discount rate would the company accept the contract? Briefly explain why.

The government lent $200,000 to Sweet Industries, who signed a 5-year, zero-interest note dated January 1, 2021 to help finance the construction of a building. The market rate of interest is 4% and the effective interest method of amortization is used. The loan will be forgiven if Sweet provides employment for a specified number of individuals for a specified period of time. If these conditions are not met, the amount is due to the government in full in five years. Sweet believes it will be able to meet the conditions.

Neighboring parishes in Louisiana have agreed to pool road tax resources already designated for bridge refurbishment. At a recent meeting, the engineers estimated that a total of $500,000 will be deposited at the end of next year into an account for the repair of old and safety-questionable bridges throughout the area. Further, they estimate that the deposits will increase by $100,000 per year for only 9 years thereafter, then cease. Determine the equivalent (a) present worth and (b) annual series amounts, if public funds earn at a rate of 5% per year. Draw also the cash flow diagram

A land surveyor just starting in private practice needs a van to carry crew and equipment. He can lease a used van for $3,000 per year, paid at the beginning of each year, in which case maintenance is provided. Alternatively, he can buy a used van for $7,000 and pay for maintenance himself. He expects to keep the van 3 years at which time he could sell it for $1,500. What is the most he should pay for uniform annual maintenance to make it worthwhile buying the van instead of leasing it if his i=20%? $821.50 $425.65 $687.50 $958.25

A local chapter of the Society for Protection of the Environment benefited from the voluntary services of two attorneys. One served as a member of the Society's board of directors, performing tasks comparable to other directors. During the year, he attended 20 hours of meetings. The other drew up a lease agreement with a tenant in a building owned by the Society. She spent five hours on the project. The billing rate of both attorneys is $200 per hour. In the year in which the services were provided, the Society should recognize revenues from contributed services of

An electric company must decide between two options for managing the blowdown water from its cooling tower. Option 1 is to continue the lease on 50 acres of land for another 5-year period and dispose of the water by spray irrigation. The landowner will move the pipe around as necessary and maintain the spray nozzles and valves. The previous lease cost $125,000 per year with payments due midway through each year. Now the landowner will require beginning of year payments of $180,000 each year. Option 2, which releases the 50 acre tract of land, involves purchasing a treatment system that will allow the recycling of most of the blowdown water. This system will have an initial cost of $1,600,000 and an AOC of $58,000 per year. However, the company will save $220,000 per year because it will not have to purchase as much make-up water as with option 1. At the end of 5 years, the company will be able to sell the equipment back to the local equipment supplier for 30% of the first cost. If the…

Josaline, the owner of a construction company, is planning to purchase specialized equipment to complete a contract awarded to her company. The first cost of the equipment is $250,000 with a life of 3 years at which time she will no longer need the equipment. The operating cost is expected to be $75,000 per year. Alternatively, a subcontractor can perform the work for $175,000 per year. Because the equipment is specialized, Josaline is notsure about the salvage value. She estimates a likely salvage of $90,000, but it might have to be scrapped for as little as $10,000 in three years. TheMARR is 15% per year.a. Is her decision to buy the equipment sensitive to the salvage value?b. Determine the salvage value at which the two alternatives break even.