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**Note: You should construct cash flow diagrams for Questions 1-5 and solve them. 1. For the cash flow shown below, determine the value of G
**Note: You should construct cash flow diagrams for Questions 1-5 and solve them.
1. For the cash flow shown below, determine the value of G that will make the future worth in year 4 equal to $6000 at an interest rate of 8% per year.
2. The effort required to maintain a scanning electron microscope is known to increase by a fixed percentage each year.
A high-tech equipment maintenance company has offered it services for a fee of $45,000 for the first year (i.e., end of year 1) with increases of 6% per year thereafter.
If a biotechnology company wants to pay for a 3-year contract up front to take, how much should it be willing to pay now if it uses an interest rate of 15% per year?
3. Determine the present worth of a maintenance contract that has a cost of $50,000 in year 1 and annual increases of 8% per year for 10 years. Use an interest rate of 8% per year.
4. The equivalent present worth of a geometric gradient series of cash flows for 10 years was found to be $19,776. If the interest rate was 15% per year and the annual rate of increase was 9% per year, what was the cash flow amount in year 1 (calculateA_1)?
5. GEM Company wants to start saving money for replacement of network servers in 6 years. If the company invests $4000 at the end of year 1 and increases the amount invested by 12% each year,
a) How much is the equivalent Present Worth if it earns interest at a rate of 8% per year? (20 points)
b) How much will be in the account 6 years from now if it earns interest at a rate of 8% per year (*Hint: Find Pg and then convert to Fg using F/P factor.)
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