Quiz b - L e Sit HI 0‘ hasjustb‘een madeinto éhaccount-that arné inter s wals f“ 6000iwill betakenfrom he accoun each ea ‘ ‘(weak,1,oo

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Unformatted text preview: L _ ' e Sit HI; 0‘ hasjustb‘een madeinto éhaccount-that 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)4-1} ,. 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 ...
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This note was uploaded on 04/01/2012 for the course MSCI 261 taught by Professor Bonkoo during the Winter '09 term at Waterloo.

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Quiz b - L e Sit HI 0‘ hasjustb‘een madeinto éhaccount-that arné inter s wals f“ 6000iwill betakenfrom he accoun each ea ‘ ‘(weak,1,oo

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