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chubhunter [2.5K]
4 years ago
12

#1 What is the value today of a money machine that will pay $2,253.00 per year for 5.00 years? Assume the first payment is made

today and that there are 5.0 total payments. The interest rate is 9.00%.
Business
1 answer:
Tcecarenko [31]4 years ago
3 0

Answer:

Value today of the a money machine = $9552.08

Explanation:

The value of the money machine is the present value of the  equal amount of payment receivable for 5 years. This series of equal payments is called an annuity.

An annuity is a series of equal payments or receipts occurring for a certain number of years.

This will be done as follows:

Step 1 :The present value (PV) of the first payment is $2,253 as it is due immediately.

Step 2 :The PV of last 4 year annuity:

PV = 2,253 × ( 1 - (1.09)^(-4))/0.09 )

     = 2,253 × 3.2397

     = $ 7299.08

Value today of the a money machine = $ 7299.08 + $2,253

                                                               = 9552.08

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There are two machines for sale that you are considering purchasing for your sawmill to produce hardwood flooring. You want to f
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Answer:

1. The Cpk of machine 1 would be 0.952

2. The Cpk of machine 2 would be 1.111

3.  I would buy machine 2, because the Cpk value is more than 1.

4. The Cpk would be 2.222

Explanation:

1. In order to calculate the Cpk of machine 1 we would have to use to following formula:

Process capability index: Cpk= Min [(mean-L spec)/3sd; (U spec-mean)/3sd]

According to given data:

In machine 1, mean= 48mm

L spec= 46

U spec= 50

Standard deviation sd= 0.7

Therefore, Cpk of machine 1= [0.952;0.952]= 0.952

1. In order to calculate the Cpk of machine 2 we would have to use to following formula:

Process capability index: Cpk= Min [(mean-L spec)/3sd; (U spec-mean)/3sd]

According to given data:

In machine 2, mean= 47

L spec= 46

U spec= 50

Standard deviation sd= 0.3

Therefore, Cpk of machine 2= [1.111;3.333]= 1.111

3. If my goal is to be capable, I would buy machine 2, because the Cpk value is more than 1.

4. If you combine the best of both machines to calculate the cpk we to make the following calculation:

Combination specification, mean= 48 and L spec= 46 and U spec= 50, Standard deviation sd= 0.3

Therefore, Cpk= [2.222;2.222]= 2.222

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