A petrochemical company is considering the purchase of a new serial production line to manufacture a new type of an engine oil; the company expects savings in production costs by $100,000 in each of the first 3 years and by $200,000 in each of the next 2 years. What is the present worth of the cost savings if the company uses an interest rate of 15% per year on such investments? Problem 2 A motivative accountant is planning for his early retirement 25 years from now. He believes he can comfortably set aside $10,000 each year starting now. If he plans to start withdrawing money 1 year after he makes his last deposit (i.e., start withdrawing at year 26), what uniform amount could he withdraw each year for 30 years, if the account earns interest at a rate of 8% per year? Problem 3 Use the cash flow diagram below to calculate the amount of money in year 5 that is equivalent to all the cash flows shown, if the interest rate is 12% per year. 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Year $1000 year. Problem 4 Find the value of x in the diagram below that will make the equivalent present worth of the cash flow equal to $15,000, if the interest rate is 15% per P = $15,000 $2000 $2000 $1000 7 Year Problem 5 A manufacturing company has an operating cost per machine equal to $22,000 per year for years 1 and 2 and then it increases by $1000 per year through year 5 (i.e., $23,000 in year 3, $24,000 in year 4, and $25,000 in year 5), what is the equivalent uniform annual cost per machine (i.e., years 1 through 5) at an interest rate of 12% per year? Problem 6 A company has a revenue of $8000 per year for years 1 through 5; however, beginning in year 6, income decreased by 15% per year each year through year 20. Calculate the future value in year 20 of this income at 10% per year.