Homework 2 Solution

Homework 2 Solution - Homework 2 Solution 1. Draw the net...

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Homework 2 Solution 1. Draw the net cash flow diagrams for each of the following situations: a. The sum of $100,000 is invested in a project at Time 0. Over the next 5 years, the project produces $50,000 per year in revenues with $2000 in expenses. b. A piece of equipment is purchased for $25,000. Its annual operating and maintenance (O&M) costs are $1000 in Year 1. The O&M costs increase by $500 in each of the next four years. At the end of Year 5, the equipment is sold for scrap, generating $2000 in revenue. c. Annual deposits totaling $75,000 are made into an account for each of three years. One year later $235,000 is withdrawn from the account. 0123 4 $75,000 $235,000 $75,000 01234 $25,000 5 $1000 $1000 $2500 0 1234 $100,000 5 $48,000/yr
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2. Keisha borrows $85,000 at an interest rate of 4.5% per year. The loan will be repaid as a lump sum at the end of 5 years. Create a table defining the amount of interest charged each year and the total
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This note was uploaded on 12/07/2011 for the course CIVL 4111 taught by Professor Moore,l during the Fall '08 term at U. Memphis.

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Homework 2 Solution - Homework 2 Solution 1. Draw the net...

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