1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
allsm [11]
3 years ago
15

You are trying to decide whether to repaint your house or install vinyl siding. The vinyl siding will cost $13,000 today and wil

l last 25 years. Painting your house will cost $3,500 today. However, a paint job only lasts 5 years. Additionally, there will be some weather damaged boards that need replacing if you choose to paint. Replacing the boards will cost $1,000, last 5 years as well. If you keep your money in a bank account that earns 10% (EAR), would you prefer to paint or install the siding
Business
1 answer:
emmasim [6.3K]3 years ago
4 0

Answer:

we will find present value of cost over 25 years for both alternatives and would choose one which lowest PV of cost.

Vinyl siding

Cost today (start of year 1) = PV = $13,000

It will last for 25 years

Painting:

Start of year 1:

Cost Incurred today = $3,500

Cost of replacing the boards today (which will last for 25 years) = $2,500

Start of year 6:

Cost Incurred at start of year 6 = $3,500 * (1 + 5%) 5 Annual Inflation rate being 5%

PV of this cost = $3,500 * (1 + 5%) 5 / (1 + 10%) 5

Start of year 11:

Cost Incurred at start of year 11 = $3,500 * (1 + 5%) 10

PV of this cost = $3,500 * (1 + 5%) 10 / (1 + 10%) 10

Start of year 16:

Cost Incurred at start of year 16 = $3,500 * (1 + 5%) 15

PV of this cost = $3,500 * (1 + 5%) 15 / (1 + 10%) 15

Start of year 21:

Cost Incurred at start of year 21 = $3,500 * (1 + 5%) 20

PV of this cost = $3,500 * (1 + 5%) 20 / (1 + 10%) 20

Total PV of all costs = 3500 + 2500 + 3500 * (1 + 5%) 5 / (1 + 10%) 5 + 3500 * (1 + 5%) 10 / (1 + 10%) 10 + 3500 * (1 + 5%) 15 / (1 + 10%) 15 + 3500 * (1 + 5%) 20 / (1 + 10%) 20

= $14,093.94

As such PV of cost Vinyl siding is lower at $13,000 than the PV of cost at $14,093.94 in case of painting.

Thus, you would prefer to install the vinyl siding

You might be interested in
Who wants 100 points
atroni [7]

Answer:

me pls

Explanation:

5 0
3 years ago
Read 2 more answers
In a perfectly competitive market in​ short-run equilibrium,​ _______. A. the price and quantity bought and sold in the market a
Thepotemich [5.8K]

Answer:

D. Market supply and market demand determine the price and quantity bought and sold in the market.

Explanation:

In perfectly competitive market, equilibrium price and quantity is determined at the point where the aggregate supply curve and aggregate demand curve intersect.

If either supply or demand changes, the supply/demand curve will shift to intersect the demand/supply curve at a new equilibrium point.

In other words, although both suppliers and buyers are price-takers they both influence price and quantity bought and sold,<em> at the aggregate level</em>.

4 0
3 years ago
Read 2 more answers
The basic economic cost of unemployment is forgone ______. Multiple choice question. inputs output supply labor
Elena L [17]

Forgone output is the fundamental economic cost of unemployment. So, output (option (b)) is the right choice.

<h3>Forgone labour output </h3>

Forgone labour output is the amount of money that persons would have made over the course of their remaining working lives, discounted to the current year if they had not passed away too soon. Forgone labour production, like other accounting metrics like the Gross Domestic Product (GDP), is not meant to represent a gauge of society's prosperity. This brings us to the welfare-based approach, which is the second method for estimating the costs of premature death.

The potential for the production of goods and services is lost forever when the economy fails to provide enough jobs for everyone who is able and willing to work.      

Learn more about Forgone labour output here:  

brainly.com/question/16690539    

#SPJ4

4 0
2 years ago
Wilbur decides to sell his collection of rare stamps on eBay when he is filling out the information for his item he types $40 in
LenaWriter [7]

Answer:

Explanation:

Hmm........ Cancel the Delivery while its being delivered, then explaing to the person that bought it what happened and give them the $75 without ACTUALLY giving the stamp collection

7 0
3 years ago
Which pricing policy is probably "best" for a profit-oriented, low-cost producer who is introducing a new product into a market
Law Incorporation [45]
5. Penetration Pricing
Firms typically do this when offering a new product to take away some of the market shares of competitors by lowering the price of their products. 
8 0
3 years ago
Other questions:
  • An implementation of which security principle ensures that secrets stay secret?
    5·1 answer
  • Assume that your parents wanted to have $ 130,000 saved for college by your 18th birthday and they started saving on your first
    15·1 answer
  • _____ is short-term employment that may allow you to develop contacts that may help in finding a permanent job a. Part-time work
    9·2 answers
  • GoSnow sells snowboards. Each snowboard requires direct materials of $128, direct labor of $53, and variable overhead of $63. Th
    5·1 answer
  • Book Bound sells a wide variety of books to retail bookstores. Book Bound recently published two new books: a popular mystery no
    8·1 answer
  • When total revenues fall below total costs, production should end. However, if marginal revenue exceeds variable cost, productio
    6·1 answer
  • Fiscal policy refers toa.changes in the interest rate.b.changes in the money supply.c.changes in the amount of physical capital
    7·1 answer
  • Aldo has just been audited by the IRS. He does not agree with the agent's findings but believes that he has only two choices: pa
    7·1 answer
  • Which loan type provides interest subsidy meaning department of education pays your interest.
    15·1 answer
  • nokia reportedly dismissed the original iphone with its large glass surface partly because it failed one of nokia's own ruggedne
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!