Suppose that a company needs new equipment, and that the machinery in question earns the company revenue at a continuous rate of 58000t + 39000 dollars per year during the first six months of operation, and at the continuous rate of $68000 per year after the first six months. The cost of the machine is $145000. The interest rate is 8% per year, compounded continuously. a) Find the present value of the revenue earned by the machine during the first year of operation. Round your answer to the nearest cent. Value: $59503.66 b) Determine how long it will take for the machine to pay for itself; that is, how long until the present value of the revenue is equal to the cost of the machine. Round your answer to the nearest hundredth. Years:

Suppose that a company needs new equipment, and that the machinery in question earns the company revenue at a continuous rate of 58000t + 39000 dollars per year during the first six months of operation, and at the continuous rate of $68000 per year after the first six months. The cost of the machine is $145000. The interest rate is 8% per year, compounded continuously. a) Find the present value of the revenue earned by the machine during the first year of operation. Round your answer to the nearest cent. Value: $59503.66 b) Determine how long it will take for the machine to pay for itself; that is, how long until the present value of the revenue is equal to the cost of the machine. Round your answer to the nearest hundredth. Years:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The nominal interest rate is 4% per year, but compounded quarterly. What is the effective annual rate? 4.000% 4.400% 4.136% 4.336% 4.060%
4. A garment company has a contract to stone-wash Wrangler Jeans. Its operating costs are $22,000 per machine in Years 1 and 2, then they increase by 8% per year through Year 10. What is the equivalent present worth (at Time 0) of the operating costs at an interest rate of 10% per year. 5. Repeat the previous problem assuming an interest rate of 8% per year, instead.
Q.4. Subject :- Economic
What is the amount you would need to invest today or order to have $30,000 in 20 years and your investment has a 5% rate of return that is compounded annually? Round your answer to the nearest cent.
I borrowed $25,000 with an add-on rate, 4% for two years and I have to make weekly payments. Using this information, determine the amount of weekly instalment I will be making. a) Between $234 and $245 b) None of the answers is correct c) Between $254 and $265 d) Between $334 and $345 e) Between $354 and $365
6
40. Determine the exact simple interest on P10,000 for the period from January 10 to June 15, 2002, if the rate of simple interest is 12%.
Before last year, Ellie (Luke's wife) taught music and earned $30,400. She also earned $9,600 by renting out their basement as a studio apartment. Ellie saves every month. At the end of a typical year she would have saved a total of 10% from her wages and the income earned from the basement for the entire year, and earned a total of 0.5% in interest (for the entire year). At the beginning of last year, Ellie stopped teaching music. She also stopped renting out their basement, and began to use it as the office for her new web design business. The balance on her savings account was $150,000, and she took $5,000 from this account to buy a new laptop computer and a new printer (which also functions as a scanner and a facsimile). She also borrowed $12,000 from the local bank to purchase additional machinery and equipment (a graphics tablet, desktop computer, studio camera and an external hard drive). Her loan payment is $250 per month. During last year, she paid $3,000 for the lease of a…
For the following cash flow find F for two cases , first , assume that the inter - period cash flow earns no interest , second , the inter - period cash flow earns interest . Assume the interest rate is 6 % per year , compounded quarterly . Show all your work , cash flows , before , and after , how did you calculate the effective interest rate for each case , and why .
You open a credit card account that charges 1.25% interest each month on the unpaid balance. the effective annual interest rate is: