WOIE In each problem. wounst draw the cash flow diacram. Problem 1. The computer department of a Law firm is considering the purchase of a new sottware to manage its clients' information. A similar purchave 4 years ago cost $200,000. At an interest rate of 7 N per year, what is the equivalent value today of the previous $200,000 expenditure? Problem 2I What is the amount of money that you should invest now to get $25,000 in year 8 if the interest rate is 115 per year? Problem 3: A food tramportation company is considering instaling temperature lockers in all its refrigerated trucks for monitoring temperatures dyeing transt. If the whtems will reduce indurance claims by $8,000 in each of the neat 2 years, how much should the company be willing to spend now if a uses an interest fate of 12s per year? Problem af A loan of SS,000 is borrowed to be tepaid With unilorm annual payments at an interett rate of 12% per year over 5 years. What is the amount of this annual payenents? Problem 5: Stanlev, inc. makes self-clinching fasteners for staintess steel applications. it expects to acquive new punching equipment 6 yean from now, If the tompamy iets avide $125,000 each year, determine the amount available in 4 years at an earnint rate of 95 per vear. Problem 6: A construction company wants to know how much to spend on maintenance for equipment each year for the next 6 years to be equivalent to part of its prodit which equals $1 million 6 years from now. Assume the company's Malf is 20s per year. Problem 7 An arithmetic cash flow gradient series equahs $1500 in year 1. 51700 in year 2, and amounti inctealing by $200 per year theogh year 9 . At i a 10$ per year, determine the present worth of the cach flow series in year 0 Prestem 8: An automobile manufacturing company wants te sign a contract with a ditributer in China to previde shatt wheel spare parts. This vear (vear 1), the cost for shaft whel spare parts is $9,000. Based on closure of a new contract with the distributer and volume discounts, the company expects this cost to decrease. If the cost in year 2 and each year thereafter decreases by 5560, what is the equivalent annual cost for a 5-pear period at an intereit rate of 105 per year? Problem 9 : Calculate the present worth of a geometric gradient series with a cash flow of $35,000 in year 1 and decreases by 5% each year through year 6 . The interest rate is 10% per year. Problem 10: De. Ahmad is planning for his retirement places 105 of his salary each year into a stock fund. If his salary this year (end of year 1) is $160,000 and he expects his salary to increase by 2No each year, what will be the future worth of tis retirement fund aftee 15 years peovided is earns 7N per year? Problem.11: Your Aather deposited 510,000 in an investment account on the day you were born to telp pay the tuition when you go to college. If the account was worth 560,000 seventeen years after she made the deposit, what was the rate of refurn on the account? Problem 12i How long if will take to recover an investment of 548.000 if krowing that the revencie is $3000 starting year 1 and increasing by $2000 each year at a rate of return of 100 per year
