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Several years ago, a man won $27,000,000 in the state lottery. To pay off the winner, the state planned to make an initial $ 1,000,000 payment immediately, followed by equal annual payments of $1,300,000 at the end of each year for the next 20 years. Just before receiving any money, the man offered to sell the winning ticket back to the state for a one-time immediate payment of $14,400,000. Use an annual worth analysis. If the state uses a 6%/year MARR, should it accept the manjs offer? Yes v Show the annual worth of each option: Carry all interim calculations to 5 decimal places and then round your nal answer to the nearest dollar. The tolerance is :50. Parker County Community College (PCCC) is trying to determine whether to use no insulation or to use insulation that is either 1 inch thick or 2 inches thick on its steam pipes. The heat loss from the pipes without insulation is expected to cost $1.25 per year per foot of pipe. A 1-inch thick insulated covering will eliminate 89% of the loss and will cost $0.40 per foot. A 2-inch thick insulated covering will eliminate 93% of the loss and will cost $0.80 per foot. PCCC Physical Plant Services estimates that there are 250,000 feet of steam pipe on campus. The PCCC Accounting Ofce requires a 10%/year return tojustify capital expenditures. The insulation has a life expectancy of 10 yea rs. Show the internal rates of return used to make your decision: Comparison 1: Comparison 2: Determine which insulation (if any) should be purchased using an internal rate of return analysis. Cany all interim calculations to 5 decimal places and then round your nal answer to 1 decimal place. The tolerance is 10.2. The Petersik family is considering purchasing a second home to use for short term rentals near the beach. If it purchases the house, they will place a down payment of $60,000 on the house. They estimate they will get an annual net rental prot of $9,500 after their mortgage and expenses are paid. After 18 years, they plan to pass the rental home along to their children, so assume the home has negligible salvage value. What would be the ERR if the Petersik family decides to invest in a rental home, assuming they keep the home for 18 years? Assume their MARR is 11%. Click here to access the TVM Factor Table calculator. % Carry all interim calculations to 5 decimal places and then round your nal answer to 1 decimal place. The tolerance is 10.2. Should the Petersik family invest in the rental home? A company is trying to decide whether it should upgrade a machine it has or purchase a newer version of the machine. It will need to use the machine for the next 4 years. If it upgrades the machine it already owns, this would cost $39,000; the machine it owns would cost $9,700 per year to operate and maintain. At the end of 4 years, the machine would have a salvage value of $1,800. Alternatively. it could trade in the machine it owns for $13,000 and purchase a new machine for $94,000. The new machine would cost $2,400 per year to operate and maintain. At the end of 4 years, the machine would have a salvage value of $14000. Assuming the company has a MARR of 8%, compute the EUAC of both the upgraded and new machine using the insider perspective. Click here to access the TVM Factor Table Calculator. EUAC(rebuild): $ EUAC(new): Carry all interim calculations to 5 decimal places and then round your nal answers to a whole number. The tolerance is 15. Which alternative would you recommend? A semi-tractor costs $190,000. The driver ofthe truck plans to use the truck for 6 years, after which point it will have a salvage value of $30,000. The cost to operate and maintain the truck each year is $10,000. If the driver has a MARR of 6%, what is the capital recovery cost of the semi-tractor? Click here to access the TVM Factor Table Calculator. Carry all interim calculations to 5 decimal places and then round your nal answer to a whole number. The tolerance is :5. You plan to purchase a car for $28,000. Its market value will decrease by 20% per year. You have determined that the IRS-allowed mileage reimbursement rate for business travel is about right for fuel and maintenance at $0.485 per mile in the lst year. You anticipate that it will go up at a rate of 10% each year. with the price of oil rising, inuencing gasoline. oils. greases, tires, and so on. You normally drive 15,000 miles per year. Your MARR is 9%. What is the optimum replacement interval for the car? Round your answer to a whole number. Show the EUAC value used to reach your decision: $ Carry all interim calculations to 5 decimal places and then round your nal answer to the nearest dollar. The tolerance is 110