EBK ENGINEERING ECONOMY
17th Edition
ISBN: 9780134838229
Author: Sullivan
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 19P
To determine
Some ethical and economical issues from walking away from underwater loan.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The local bank pays 4% interest on savings
deposits. In a nearby town, the bank pays 1% per
quarter. A man who has $3000 to deposit
wonders whether the higher interest paid in the
nearby town justifies driving there.
1. How much will the man receive after 2 years if
he used the local bank? The answer is closest to:
$3123
$3246
$3060
$3186
!
Required information
Consider the following factors.
1. (F/P,19%,34)
2. (A/G,23%,45)
Find the numerical values of the factors using linear interpolation.
The numerical value of factor 1 is
The numerical value of factor 2 is
On the advice of your uncle, you purchased 10 shares of a well-established U.S.-based corporate stock for $21 per share. After 1 quarter, you received $0.25 per share dividends each quarter for 2 years. At that point, the stock price had gone down in a short-term recession, so you purchased 10 more shares at $18 per share. The stock continued to pay 25¢ a share on all 20 shares. After 3 years (12 quarters), you decided to sell the stock since it had increased in market value to $24 per share. Make the following assumptions: (a) no commissions for the purchase or sale of the stock, (b) no government taxes on the dividends, and (c) quarterly compounding of the rate of return. What is the effective interest rate per year?
The effective interest rate per year is %.
Knowledge Booster
Similar questions
- Suppose you started a savings account and put $70 in the bank and left it there for 1 year. Also assume you put no other money in that account. If the annual interest rate is R = 0.05 (5%), then at the end of the year you would have how much in your account at the end of the year? Group of answer choices A) $73.50 B) $70.50 C) none of the other options. D) $75 E) $72.80arrow_forwardWhat is the value of (F/A, i, N) if (P/A, i, N) = 5.3081?arrow_forwardWhat life insurance option has a lower premium, is only life insurance, and purchased for a specific period of time. (10, 15, 20 years)arrow_forward
- Simplifying [(n+1)! / n!] gives what?arrow_forwardBusiness Decisions Sharon, the owner of the Brentwood Motel, is planning to renovate all the rooms in her motel. There are two plans before her. Plan A calls for an immediate cash outlay of $400,000, whereas plan B calls for an immediate outlay of $200,000. Sharon estimates that adopting plan A would yield an income stream of f(t) = 3,060,000e0.03t dollars/year for the next 5 years, whereas adopting plan B would yield an income stream of g(t) = 3,200,000 dollars/year for the next 5 years. If the prevailing rate of interest is 4%/year compounded continuously, which plan will yield the higher net income (in dollars) at the end of 5 years? plan A plan Barrow_forwardLeast-cost abatement curve Solar PV Nuclear Feasible set Coal CCS new build Low-penetration wind Coal CCS retrofit High-penetration wind Iron and steel CCS new build 8.37 billion euros Cost of abatement (billions € = cost per tonne abated x gigatonnes abated) %3D Environmental quality, E (amount abated, GTCO,) 11.2 GTCO, 4.94 GTCO,arrow_forward
- A small business promises a profit of $800 on an initial investment of $2000 after 4 years. 1. a) Calculate IRR. b) Would you invest in this business if the market rate compounded annually.(mr=9%)arrow_forwardA road can be paved with either asphalt or concrete. Concrete costs $20,000/mile and lasts for 20 years. What is the maximum that should be spent on asphalt, which lasts only 10 years? The annual maintenance costs are $500/mile for both pavements. The cost of money = 8%.arrow_forwardQ38/ 3&4arrow_forward
- The US government offers Treasury bonds which will pay $10,000 in 5 years time. If the market interest rate is 3%, what would be the most an investor would pay for the bond today? $8,626 $11,131 $5,872 $12,141 $7,245arrow_forwardSuppose that the City of Nairobi is planning a bid to host the 2032 Olympics and has estimated the following benefits: The estimat benefits at the end of year 1 (8,) are $300 million, at the end of year 2 (B.) are $200 million, and at the end of year 3 (a,) only $100 million (after the third year there are no further benefits). If the estimated interest rate is 4% (r0.04) then using the estimated value of benefits eguation below, calculate the maximum value (and therefore, the maximum amount that Nairobi should bid) for the 2032 Olympics. B, B, (1 (1+ (1+r)arrow_forwardPierre Rizzo is considering purchasing a new car. The price of the car is $60000, and Pierre hopes to keep it 4 years and then sell it for $19000. Based on past experience, Pierre drives about 12,000 km per year and lives in a downtown apartment where they must pay a $63 per month parking fee.Pierre has budgeted the following automobile expense items for the next 4 years: Expense Gasoline(13.7L Per 100KM)($1.71 Per Liter) Licence/Registration Insurance Maintenance Tires ($1407 per set that last 42000KM) Parking (48 Months) Interest Depreciation (STRAIGHT LINE) Cost Fixed/Variable Variable $483 Fixed $3309 Fixed $960 Variable Variable $3024 Fixed $3090 Fixed Fixed CALCULATE THE FOLLOWING USING THE ABOVE INFORMATION: TOTAL FIXED COSTS (TFC) TOTAL VARIABLE COSTS (TVC) TOTAL KMS TOTAL COSTS (TC) 48000KM AVG. FIXED COSTS/KM AVG. VARIABLE COSTS/KM S AVG. TOTAL COSTS/KM Sarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education