Major overhaul expenses of $5,000 each are anticipated for a large piece of earthmoving equipment. The expenses will occur at the end of the year four and will continue every three years thereafter up to and including year 13. The interest rate is 12% per year. a. Draw a cash-flow diagram b. What is the present equivalent of the overhaul expenses at time 0? c. What is the annual equivalent expense/annuity during only years 5-13?
Major overhaul expenses of $5,000 each are anticipated for a large piece of earthmoving equipment. The expenses will occur at the end of the year four and will continue every three years thereafter up to and including year 13. The interest rate is 12% per year. a. Draw a cash-flow diagram b. What is the present equivalent of the overhaul expenses at time 0? c. What is the annual equivalent expense/annuity during only years 5-13?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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Major overhaul expenses of $5,000 each are anticipated for a large piece of earthmoving equipment. The expenses will occur at the end of the year four and will continue every three years thereafter up to and including year 13. The interest rate is 12% per year.
a. Draw a cash-flow diagram
b. What is the present equivalent of the overhaul expenses at time 0?
c. What is the annual equivalent expense/annuity during only years 5-13?
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