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Q: warranty
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A company estimates that 0.7% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $50.
If they offer a 2 year extended warranty for $7, what is the company's expected value of each warranty sold?
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- A company estimates that 0.6% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $100. If they offer a 2 year extended warranty for $7, what is the company's expected value of each warranty sold?A company estimates that 0.8% of their products will fail after the original warranty period but within 2 years of the purchase, with a replacement cost of $50. If they offer a 2 year extended warranty for $4, what is the company's expected value of each warranty sold? Submit Question7. A company must cancel a loan whose amount will have a value of $ 300,120.45 at the end of 6 years, if the company agrees to make semi-annual payments equal to 3.5% per annum effective. What will be the value of payment if you make the first one 18 months after the transaction? $ 27,742.78 8. What amount would have to be invested at the end of each year for the next 8 years, at 4% convertible? semiannually to have $ 5,000 at the end of the term. $ 541.87
- 5. Calm Co. provides warranty for its products. Experience shows that 10% of products sold require warranty repairs and that 70% of the warranty costs are expended in the year of sale and 30% in the following year. Half of the defective products require minor repairs that cost 20% of the sale price, while the other half require major repairs that cost 70% of the sale price: A 3% risk adjustment factor is considered appropriate reflect the uncertainties in the cash flow estimates. Sales of P4,000,000 were made evenly throughout 20x1. The outflows for repairs in 20x2 (for the products sold in 20x1) are expected to take place on June 30, 20x2. The appropriate discount factor is 0.95238. How much is the warranty provision at December 31, 20x1? a. 264,857 b. 176,571 c. 105,943 d.52,9717 years ago a fixed rate mortgage for $ 100,000 was issued which would fully amortize monthly in 20 years. The contract rate was 8%. Refinancing costs $. 3,000 Now that rates have fallen to 6%. What is the monthly payment? What is the loan balance? What is the Break-even rate for refinancing? BER Is refinancing a good idea?What is the EAC to keep a piece of new equipment operating? The warranty covers repair costs for the first 2 years, but expected repair costs are $1500 per year for the rest of the 7-year life. Normal maintenance is expected to cost $1800 annually. There is an overhaul costing $8500 at the end of year 4. The firm’s interest rate is 8%
- As a result of a slowdown in operations, Tradewind Stores is offering employees who have been terminated a severance package of $109,000 cash paid today, $109,000 to be paid in one year, and an annuity of $30,000 to be paid each year for 8 years. Required: What is the present value of the package assuming an interest rate of 9 percent? (Future Value of $1. Present Value of $1. Euture Value Annuity of $1. Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar. Present ValueA company has a bank loan outstanding that requires it to make annual payments of $1,000,000 at the end of each of the next three years. The bank has offered to the company to skip the next two payments and instead make a single payment at the end of the loan's term in three years' time. If the interest rate on the loan is 6% p.a., compounded quarterly, the final payment that will make the company indifferent between the two payment options is closest to: a.$2,666,283. b.$2,673,012. c.$3,183,600. d.$3,187,856.A company has a bank loan outstanding that requires it to make annual payments of $1,000,000 at the end of each of the next three years. The bank has offered to the company to skip the next two payments and instead make a single payment at the end of the loan's term in three years' time. If the interest rate on the loan is 6% p.a., compounded quarterly, the final payment that will make the company indifferent between the two payment options is closest to: Group of answer choices A $2,666,283. B $2,673,012. C $3,183,600. D $3,187,856.
- A borrower takes out a 30-year loan for a house worth $250,000. If the annual interest rate is 6%. if the borrower chooses to pay $40,000 at the end of year 12, what will the new payments be assuming the loan maturity will not be reduced?A buyer purchased an item worth P10,000 with no down payment at 0.85% per month for 24 months. What is the monthly payment? How much is the finance charge?A lender makes a 10 year loan of 120,000 which is to be paid by level payments at the end of each month. The interest rate for the initial loan is 6 percent, nominal. After the 4'th year (48'th payment), the loan is sold to another investor, who wishes to make 3 percent interest (annual effective) off of the investment. But the borrower's payments remain the same. What is the selling price?