Question
a). If an investment of $4000 is made today grows to $7600 four years from now, determine the approximate rate of return. b) In how
a). If an investment of $4000 is made today grows to $7600 four years from now, determine the approximate rate of return.
b) In how many years, doing uniform investments of $400 per year will yield $10,000 with the rate of return of 16%.
c) An oil and gas company bought a particular production machine, the initial maintenance cost of which is stated to be $4500. If the maintenance cost is expected to increase to a level of $15,000 in 11 years, determine the constant amount of increase in the operating cost per year (G), and construct the corresponding cash flow diagram.
d) An oil and gas company plans to deposit money in to an account for the expected maintenance costs in the future. The base amount of money that will be deposited at the end of next year is stated to be $4500, which is estimated to increase by $500 per year for 9 years. Determine the equivalent (1) present worth and (2) annual series amounts if funds earn interest at a rate of 8% per year.
Construct the corresponding cash flow diagrams.
Answer the questions on the concepts of time value of money and measure of worth.
Draw the corresponding cash flow diagrams when necessary.
Step by Step Solution
3.29 Rating (158 Votes )
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started