This preview shows pages 1–3. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: L _ ' e Sit HI; 0‘ hasjustb‘een madeinto éhaccountthat arné inter s
wals f“ 6000iwill betakenfrom he accoun each ea ‘ ‘ _ (weak,1} '.
,oo +~eoo‘0(P/A,3%,8)} +{‘(1‘+03)‘1}  , ,ooo — 00(P/A,3%,8)‘},—£{(51+.03)41} ,. I O’N) .L _ k
F ‘ N) es N goes to infinity is i j.
0‘. N) . ‘ ' ng ,Syetem fonyogr office b’UiIding costs $2,000 now, and the electricl
$ 0 in he first month,“ then increasing by $0.20 per month each month gomp'ar
the presen;,_wonh‘of these costs over 5‘ years, using a nominal‘inferest it p nding. uw ID Number VEVSiopr C Blue I Problem 3. [12 marks] Ariel plans to deposit $5000 into an account earning 10% interest per year, each year for 8 years, starting one
year from now, to save for some travel. Ariel has decided that she wants to make one trip 12 years from now
that will require a $15,000 withdrawal then; she also wants to make 3 smaller trips that will require withdrawals
of X dollars each year for 3 years, in years 9, 10 and 11 from now. (a) Draw a rough cash flow diagram to represent the deposits and the withdrawals. “:1leth 15” " .«r
u»
\
e301"
W5“
«i
(b) Calculate the value of X, the amount of each ofthe3withdr, ., ' tfactor symbols in your
answer.  I on—CQ
+4 , , o b »
ﬂew/8 9 ‘50“ (Pﬁ’ W» [59 +XW4’ W" J 1 50"” (F’l’lf)=”
$ __§,n xl/ﬂ—WI + Ll/JZMX ‘6 ﬂawx 6.6%?01 :0
SD X s+i7/X¢ .. [01?5.7 : [8 ‘ “12M 2.1M ﬁlm/rm ZM“ UW ID Number slam W9 ‘ Problem 4. ‘ " A‘proposal to produce and sell a new gardening tool is under consideration. The first cost of equipment in the
factory would be $4 million now, the salvage value of the equipment would be 35 0.80 million in 10 years, the
annual operating costs would be $ 0.90 million in the first year, and the annual operating costs would increase _ by 2% per year each year compared to the previous year. It is expected that 0.7 million tools would be sold
each year for 10 years,‘at a price that starts at $20 per tool in the first year, and decreases by $0.50 per year
each year compared to the previous year. The MARR = 11% per year. Write an expression involving the above data, and interest factor symbols, that would give the overall present worth of the proposed investment. See page 1 for the list of allowed interest factor symbols. Do not evaluate 6
31‘”
the expression, as the arithmetic will just take a lot of time. 6 6; t ‘ ) 0‘ q
20» ‘
017/1302” Djdnlw ASCU’S‘J ...
View
Full
Document
This note was uploaded on 04/01/2012 for the course MSCI 261 taught by Professor Bonkoo during the Winter '09 term at Waterloo.
 Winter '09
 BONKOO

Click to edit the document details