4.7) Convert the given interest rates in the left-hand column into the nominal rates listed in the righthand column. (As

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4 7 Convert The Given Interest Rates In The Left Hand Column Into The Nominal Rates Listed In The Righthand Column As 1 (48.04 KiB) Viewed 39 times

4 7 Convert The Given Interest Rates In The Left Hand Column Into The Nominal Rates Listed In The Righthand Column As 2 (48.04 KiB) Viewed 39 times

4 7 Convert The Given Interest Rates In The Left Hand Column Into The Nominal Rates Listed In The Righthand Column As 3 (48.04 KiB) Viewed 39 times

4 7 Convert The Given Interest Rates In The Left Hand Column Into The Nominal Rates Listed In The Righthand Column As 4 (50.69 KiB) Viewed 39 times

4 7 Convert The Given Interest Rates In The Left Hand Column Into The Nominal Rates Listed In The Righthand Column As 5 (63.32 KiB) Viewed 39 times

4.7) Convert the given interest rates in the left-hand column into the nominal rates listed in the righthand column. (Assume 4 weeks/month.) Given Interest Rate Desired Interest Rate 1% per month Nominal rate per year 3% per quarter Nominal rate per 6 months 2% per quarter Nominal rate per year 0.28% per week Nominal rate per quarter 6.1% per 6 months Nominal rate per 2 years 4.25) A structural engineering consulting company is examining its cash flow requirements for the next 6 years. The company expects to replace office machines and computer equipment at various times over the 6-year planning period. Specifically, the company expects to spend $21,000 two years from now, $24,000 three years from now, and $10,000 five years from now. What is the present worth of the planned expenditures at an interest rate of 10% per year, compounded semiannually? 4.44) If you deposit $1000 per month into an investment account that pays interest at a rate of 6% per year, compounded quarterly, how much will be in the account at the end of 5 years? 4.52) U.S. Steel is planning a plant expansion that is expected to cost $13 million. How much money must the company set aside now in a lump-sum investment to have the money in 2 years? Capital funds earn interest at a rate of 12% per year, compounded continuously. 4.57) Find (a) the present worth P, and (b) the equivalent uniform annual worth A for the cash flows shown below.
10. Y $100 5100 5100 5100 5100 5160 5100 5100 5.8) The manager of a canned food processing plant must decide between two different labeling machines. Machine A will have a first cost of $42,000, an annual operating cost of $28,000, and a service life of 4 years. Machine B will cost $51,000 to buy and will have an annual operating cost of $17,000 during its 4-year life. At an interest rate of 10% per year, which should be selected on the basis of a present worth analysis? 5.19) Machines that have the following costs are under consideration for a robotized welding process. Using an interest rate of 10% per year, determine which alternative should be selected on the basis of a present worth analysis, First cost $ Annual operating cost. $ per year Salvage value. S Life, years Machine X Machine Y -250,000 - 430.000 -60.000 - 40.000 70,000 95,000 3 6 5.26) An industrial engineer is considering two robots for purchase by a fiber-optic manufacturing company. Robot X will have a first cost of $80,000, an annual maintenance and operation (M&O) cost of $30,000, and a $40,000 salvage value. Robot Y will have a first cost of $97,000, an annual M&O cost of $27,000, and a $50,000 salvage value. Which should be selected on the basis of a future worth comparison at an interest rate of 15% per year? Use a 3- year study period. 5.31) A wealthy businessman wants to start a permanent fund for supporting research directed toward sustainability. The donor plans to give equal amounts of money for each of the next 5 years, plus one now (i.e., six donations) so that $100,000 per year can be withdrawn each year forever, beginning in year 6. If the fund earns interest at a rate of 8% per year, how much money must be donated each time?
5.35) Compare the alternatives shown on the basis of their capitalized costs using an interest rate of 10% per year. Alternative M Alternative N First cost, $ - 150,000 -800,000 Annual operating -50,000 - 12,000 cost, $ per year Salvage value, s 8,000 1,000,000 Life, years 5 6.8) Eight years ago, Ohio Valley Trucking purchased a large-capacity dump truck for $115,000 to provide short-haul earthmoving services. The company sold it today for $45,000. Operating and maintenance costs averaged $10,500 per year. A complete overhaul at the end of year 4 cost an extra $3600. Calculate the annual cost of the truck at 8% per year interest. 6.12) Humana Hospital Corporation installed a new MRI machine at a cost of $750,000 this year in its medical professional clinic in Cedar Park. This state-ofthe-art system is expected to be used for 5 years and then sold for $75,000. Humana uses a return requirement of 24% per year for all of its medical diagnostic equipment. As a bioengineering student currently serving a coop semester on the management staff of Humana Corporation in Louisville, Kentucky, you are asked to determine the minimum revenue required each year to realize the expected recovery and return 6.13) Polypropylene wall caps, used for covering exterior vents for kitchen cooktops, bathroom fans, dryers, and other building air exhausts, can be made by two different methods. Method X will have a first cost of $75,000, an operating cost of $32,000 per year, and a $9000 salvage value after 4 years. Method Y will have a first cost of $140,000, an operating cost of $24,000 per year, and a $19,000 salvage value after its 4-year life. At an interest rate of 10% per year, which method should be used on the basis of an annual worth analysis?