T Page 7 Question 4 [Total 15 marks] A big construction equipment is getting old. Major overhaul expenses of $ (50,000 +

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T Page 7 Question 4 Total 15 Marks A Big Construction Equipment Is Getting Old Major Overhaul Expenses Of 50 000 1 (123.59 KiB) Viewed 37 times

T Page 7 Question 4 [Total 15 marks] A big construction equipment is getting old. Major overhaul expenses of $ (50,000 + D81,000) are expected to occur at EOY (End of Year) 3 and will continue every three years thereafter up to and including year 15. The discount rate is assumed to be (3 + D8)% per year. (a) Draw a cash-flow diagram by using the convention mentioned in Lecture 3. (b) What is the present equivalent value of the overhaul expenses as of today? Round off your final answer to the nearest hundred. (c) What is the future equivalent value of the overhaul expenses at EOY 157 Round off your final answer to the nearest hundred. (d) What is the annual equivalent expense from EOY 4 to EOY 15? Round off your final answer to the nearest hundred. (Hint: You need to figure out P3 first) Answer (a) (b) Bona