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Show your work when doing calculation and also, draw a cash flow diagram for each question. Type formulas and make sure in include units. Alternatively,
Show your work when doing calculation and also, draw a cash flow diagram for each question. Type formulas and make sure in include units. Alternatively, you can write your answer and either scan it or take a picture and insert it into a Word document.
Submit the assignment in Black Board only (Only MS Word or PDF file. Dont use the textbox in Blackboard to write your answers).
Because market interest rates were near all-time lows at 4% per year, a hand tool company decided to call Ci.e., pay off the high-interest bonds that it issued 3 years ago. If the interest rate on the bonds was 9% per year, how much does the company have to pay the bond holders? The face value (principal) of the bonds is $6,0OO,OOO The National Highway Traffic Safety Administra- tion raised the average fuel efficiency standard to 35.5 miles per gallon for cars and light trucks by the year 2016. The rules will cost consumers an average of $434 extra per vehicle in the 2O12 model year. If a person purchases a new car in 2012 and keeps it for 5 years, how much must be saved in fuel costs each year to justify the extra cost? Use an interest rate of 8% per year. Western Hydra Systems makes a panel milling ma- chine. with a 2.7-m-diameter milling head that emits low vibration and processes stress-relieved aluminum panels measuring up to 6OOO mm long. The company wants to borrow money for a new production/warehouse facility. If the company of fers to repay the loan with $60,000 in year 1 and amounts increasing by $10,OOO each year through year 5, how much can the company borrow at an interest rate of 1O% per year? Determine the difference in the present worth val- ues of the following two commodity contracts at an interest rate of 8% per year Contract 1 has a cost of $10,000 in year 1; costs will escalate at a rate of 4% per year for io years Contract 2 has the same cost in year 1, but costs will escalate at 6% per year for 11 yearsStep by Step Solution
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