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
Novay_Z [31]
3 years ago
6

Annual maintenance costs for a particular section of highway pavement are $2500. The placement of a new surface would reduce the

annual maintenance cost to $500 per year for the first 3 years and to $1000 per year for the next 7 years. After 10 years the annual maintenance would again be $2500. If maintenance costs are the only saving, what investment can be justified for the new surface? Assume interest at 5%.
Business
1 answer:
rewona [7]3 years ago
6 0

Answer:

The maximum investment is $6,360.111

Explanation:

Giving the following information:

The placement of a new surface would reduce the annual maintenance cost to $500 per year for the first 3 years and to $1000 per year for the next 7 years. After 10 years the annual maintenance would again be $2500.

We need to find the net present value. The maximum initial investment will be the amount that makes the NPV cero.

NPV=∑[Cf/(1+i)^n]

Cf= cash flow

<u>For example:</u>

Year 1= 500/1.05= 476.19

Year 3= 500/1.05^3= 431.92

Year 5= 1,000/1.05^5= 783.53

NPV= 6,360.111

The maximum investment is $6,360.111

You might be interested in
A company purchased equipment valued at $120,000. It traded in old equipment for a $95,000 trade-in allowance and the company pa
Zepler [3.9K]

Answer:

$120,000

Explanation:

Data provided in the question

Purchase value of an equipment = $120,000

Trade in allowance = $95,000

Paid cash = $25,000

Cost of an old equipment = $110,000

Accumulated depreciation = $33,000

So by considering the above situation, the recorded value of the equipment is $120,000 as the cash is paid for $25,000 and the trade in allowance is $95,000

So it would be equal to the purchase value i.e $120,000

8 0
3 years ago
On January 1, 2021, the Taylor Company adopted the dollar-value LIFO method. The inventory value for its one inventory pool on t
tresset_1 [31]

Answer and Explanation:

The computation of the ending inventory for the year 2021, 2022 and 2023 is shown in the attachment below

It is to be divided into two parts

1. Inventory converted to the base year in which the base year is considered by taking the cost index  

2. Inventory converted to cash in which the inventory converted to the base year, cost index is considered so that the inventory converted to cash could come plus the value of the inventory using the LIFO method also comes

3 0
3 years ago
Jessejhernandez my other account got deleted lol
NISA [10]
Thanks for the free points?
Jdychvjiebsusjhzudhdufufdbdujdbdhdi
And
Bshshdudhdbdhsbudjfbfhxicibd
Also
Dbdjbdvdgjsnsbd
7 0
3 years ago
Read 2 more answers
What is the value of an annuity due at the end of 15 years of quarterly deposits of $2,000.00 with terms of 8 percent compounded
elena55 [62]

Explanations:

The formula for future value given

deposit amount, A = 2000

deposit interest,  i = 8% annually = 8/4 = 2%, compounded quarterly

compounding period = quarterly

number of periods, n = 15 years = 4*15 = 60 periods (quarters)

The future value is given by:

FV = A*((1+i)^n-1)/i

= 2000*(1.02^60/0.02)

= $228103.08  (rounded to the nearest cent).

The difference in the answer choice is probably due to the teacher's calculator does not have sufficient accuracy.

4 0
3 years ago
Can anyone help Please ‍♀️
gayaneshka [121]
Technical college, junior colleges
3 0
2 years ago
Other questions:
  • Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2010. Demers reported common stock of $300,000 and retain
    12·1 answer
  • You manage a company that competes in an industry that is comprised of four equal-sized firms that produce similar products. A r
    7·1 answer
  • aka is considering sending a message regarding a raise but is concerned since the company is struggling financially. Taka has de
    11·2 answers
  • How is a free-market economy different from a mixed economy?
    7·2 answers
  • How do banks benefit of giving people loans
    15·2 answers
  • What happens to the equilibrium price when supply goes down? A. The price goes up. B. The price goes down. C. The price stays th
    11·1 answer
  • According to the AD-AS model, if the economy is initially at its long-run potential growth rate, then a temporary increase in th
    10·1 answer
  • Georgia Products Inc. completed and transferred 163,000 particle board units of production from the Pressing Department. There w
    15·1 answer
  • The periods of time to undertake goals can be:
    15·1 answer
  • TB MC Qu. 08-152 Minor Company installs a machine... Minor Company installs a machine in its factory at the beginning of the yea
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!