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Assume compound interest unless otherwise stated. Problems 1 - 1 3 must be solved with factors and / or Excel PV , FV , PMT
Assume compound interest unless otherwise stated. Problems must be solved with factors andor Excel PV FV PMT NPER, or interest rate functions; you may not use NPV for these problems.Formulation including factors calculations must be shown for credit. For each problem, include a cash flow diagram. If Excel is used for calculations, include the Excel formulas used.
A automotive manufacturer has a year now to end of year fixed price contract with a supplier for parts costing $m per year. Once the contract ends, the cost is expected to rise at per year through year Find the equivalent P and A for these cashflows at i
B A investment costs $ at time to implement, but will return $ at end of year $ at end of year and $ at end of year What is the rate of return on this investment? hint: use IRR function in Excel
C An improvement in a production line cost $ to implement at time but will return $ year in cost savings and new revenues. At $ interest, how many years will it take until the improvement project breaks even?
D A project has a complex set of cash flows associated with it with the net cash flow each years as follows: time : $k; time :$k; time : $k; time : $k; time : $k each year; time: $k; time : $k At i find the equivalent P for this project.
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