1
Maintenance expenditures for a structure with a twenty
year life will come as periodic outlays of $1,000 at the
end of the fifth year, $2,000 at the end of the tenth year,
and $3,500 at the end of the fifteenth year. With interest
at 10%, what is the equivalent uniform annual cost of
maintenance for the twentyyear period?
A) $200
B) $262
C) $300
D) $325
2
An alumnus has given Michigan State University ten
million dollars to build and operate a laboratory. Annual
operating cost is estimated to be one hundred thousand
dollars. The endowment will earn 6% interest. Assume
an infinite life for the laboratory and determine how
much money may be used for its construction.
A) $5x10
6
B) $8.33x10
6
C) $8.72x10
6
D) $9.90xL0
6
3
An investment pays $6000 at the end of the first
year, $4000 at the end of the second year, and $2000
at the end of the third year. Compute the present
value of the investment if a 10% rateofreturn is
required.
A) $8333
B) $9667
C) $10,300
D) $12,000
4
An amount F is accumulated by investing a single
amount P for n compounding periods with interest rate of
i. Select the formula that relates P to F.
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 Spring '08
 Dr.Kalim
 annual operating cost, uniform annual cost, present equivalent cost

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