An engineer

A firm is considering purchasing $8000 of small hand tools for use on a production line. It is estimated that the tools will reduce the amount of required overtime work by $2000 the first year, with this amount increasing by $1000 per year thereafter. The payback period for the hand tools is closest to: Special tools for the manufacture of finished plastic products cost $15,000 and have an estimated $1000 salvage value at the end of an estimated three-year useful life and recovery period. The third-year straight-line depreciation is closest to: Refer to the facts of Problem 6.52. The first-year MACRS depreciation is closest to: An engineer is considering the purchase of an annuity that will pay $1000 per year for ten years. The engineer feels he should obtain a 5% rate of return on the annuity after considering the effect of an estimated 6% inflation per year The amount he would be willing to pay to purchase the annuity is closest to: An automobile costs $20,000 today. You can earn 12% tax-free on an auto purchase account. If you expect tire cost of the auto to increase by 10% per year, the amount you would need to deposit in the account to provide for the purchase of the auto five years from now is closest to An engineer purchases a building lot for $40,000 cash and plans to sell it after five years If he wants an 18% before-tax rate of return, after taking the 6% annual inflation rate into account, the selling price must be nearest to: A piece of equipment with a list price of $450 can actually be purchased for Cither $400 cash or $50 immediately plus four additional annual payments of $115.25. All values are m dollars of current purchasing power If the typical customer considered a 5% interest rate appropriate, the inflation rate at which the two purchase alternatives are equivalent is nearest to