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EGMfe

# EGMfe - 1 Maintenance expenditures for a structure with a...

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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 twenty-year 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% rate-of-return 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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