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Name: 1. 10 years ago, John Hancock deposited $10,000 into an account and left it undisturbed until now. The account is now worth $31,060. (15
Name: 1. 10 years ago, John Hancock deposited $10,000 into an account and left it undisturbed until now. The account is now worth $31,060. (15 points; 5 points each) 1) What was the overall ROR during the 10 years? 2) If the inflation over that period was 4% per year, what was the real ROR? 3) What is the buying power of the $31,060 now compared to the buying power 5 years ago ? Its inflation rate is 4%. A construction company can purchase a piece of equipment for $50,000 and sperd $100 per day in operating costs. The equipment will have a 5-year life with no salvage value. Alternatively, the company can lease the equipment for $300 per day. Find the number of days per year the construction company must require the equipment to justify its purchase at an interest rate of 8% per year. (10 points) 2
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