I A company that manufactures in-line mixers for bulk manufacturing is considering borrowing $1.75 million to update a production line. If it borrows the money now, it can do so at an interest rate of7.5% per year simple interest for 5 years. If it borrows next year, the interest rate will be 8% per year compound interest, but it will be for only 4 years. (a) How much interest (total) will be paid under each scenario, and (b) should the company borrow now or 1 year from now? Assume the total amount due will be paid when the loan is due in either case. 2. Chevron-Texaco expects receipts from a group of stripper wells (wells that produce less than 10 barrels per day) to decline according to an arithmetic gradient of $50,000 per year. This year's receipts are expected to be $280,000 (i... end of year 1), and the company expects the usefullife of the wells to be 5 years. (a) What is the amount of the cash flow in year 3, and (b) what is the equivalent uniform annual worth in years I through 5 of the income from the wells at an interest rate of 12% per year? 3. Ford Motor Company was able to reduce by 80% the cost required for installing data acquisition instrumentation on test vehicles by using MTS-developed spinning wheel force transducers. (a) If this year's cost (i.e., end of year 1) is expected to be $2000, what was the cost the year before installation of the transducers? (b) If the costs are expected to increase by $250 each year for the next 4 years ( .e., through year 5), what is the equivalent annual worth of the costs (years 1 through 5) at an interest rate of 18% per year? Hughes Cable Systems plans to offer its employees a salary enhancement package that has revenue sharing as its main component. Specifically, the company will set aside 1 % of total sales for yearend bonuses for all its employees. The sales are expected to be $5 million the first year, 56 million the second year, and amounts increasing by 20% each year for the next 5 years. At an interest rate of 10% per year, what is the equivalent annual worth in years I through 5 of the bonus package? 5. Thomasville Furniture Industries offers several types of high-performance fabrics that are capable of withstanding chemicals as harsh as chlorine. A certain midwestern manufacturing company that uses fabric in several products has a report showing that the present worth of fabric purchases over a certain 5-year period was $900,000. If the costs were known to geometrically increase by 5% per year during that time and the company used an interest rate of 15% per year for investments, what was the cost of the fabric in year 22 You won the big prize in the California lottery and you have to choose one of the following two payment plans: Payment Plan 1 If you choose wou will receive caminamante for five of time The Gre