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Hatshy [7]
3 years ago
14

Maintenance costs for pollution control equipment on a call for an s are expected to be $180,000 now and another $70,000.03 year

s from now. assume that the company uses a real interest rate of 9% per year and the inflation rate average is 3% per year. What is the equivalent annual cost of the equipment?
Business
1 answer:
hodyreva [135]3 years ago
4 0

Answer:

Annual cost = −64,083

Explanation:

Present maintenance costs = $180000

Maintenance costs after three years = $70000

Real interest rate = 9%

Inflation rate = 3%

Inflation adjusted interest rate, r = 0.09 + 0.03 + (0.09)(0.03)  = 12.27% per year

Annual cost = −180,000(A/P,12.27%,5) –70,000(P/F,12.27%,3)(A/P,12.27%,5)

Annual cost = −180,000(0.27927)–70,000(0.70666)(0.27927)

Annual cost = −64,083

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Tangshan Mining​ Company, with a cost of capital of 10​ percent, is considering investing in project​ A, with an initial investm
alexdok [17]

Answer:

the breakeven cash inflow for the project is $131474

Explanation:

given data

cost of capital = 10​ percent

initial investment =​ $1,000,000

useful life = 15 year

to find out

the breakeven cash inflow for the project

solution

first we consider here annual cash inflows that is =  x

now break even point is the one at which the net present value of the project  =  0

so we can say that here  

Present value of cash inflows - Present value of cash outflows = 0   .................1

here we know Present value of cash inflows = x  × PVAF ( 10%,15 years)

Present value of cash inflows = x  ×  7.6060

put value in equation 1 we get

x  ×  7.6060 - $1,000,000  = 0

solve and we get x

x = \frac{1,000,000}{7.6060}

x = $131474

so the breakeven cash inflow for the project is $131474

7 0
4 years ago
NextStep Global is a consultation firm that specializes in preparing businesses for international negotiations. What action is N
JulsSmile [24]

Answer:

Ensure a senior executive is present at business negotiations

Explanation:

The action action NextStep Global is likely to suggest in order to ensure influence at the headquarters is that a senior executive is made available at round-table negotiation discussion at the headquarters so as to bring the desired influence.

The rationale for this is that the set of people whose work station is the headquarters are senior people,hence would not be disposed with having discussions with just a mere employee who cannot be said to represent the company.

3 0
3 years ago
When discussing time-value-of-money it is necessary to understand some key terminology. Which of the following terms refers to a
Elanso [62]

Answer:

C. Ordinary annuity

Explanation:

The ordinary annuity is the sequence amount of an equivalent lump sum containing a fixed amount of money to be paid or earned at the end of each term. Periods here can be in weekly, monthly, semi-annual or semi-annual, or annual. The number should be the present value

Thus, the appropriate choice is c.

Therefore, all the remaining options are wrong

5 0
3 years ago
You get a sales report every month to show the products sold from each state. You notice the sales from California are down from
Lostsunrise [7]

Answer: This is an example of a DRILL DOWN report

Explanation:

Drill down means to seek out detailed additional information on a specific subject. It involves clicking on a subject, or link or object to reveal more detail about a particular information.

To drill down through a series of information means you want to get a specific information, it involves accessing information but starting first with the general options before proceeding through the database to get successive ideas on the subject matter. Most times people drill down on an information when they have only the summary, then they will "dig Futher" to get suitable information according to their logic.

6 0
3 years ago
You observe the 12-month and 18-month zero coupon rates for U.S. Treasury securities are 1.95% and 2.25%, respectively. Assuming
borishaifa [10]

Answer:

semiannual 1.42%

yearly          2.85%

Explanation:

Those are annual rate so we need to determinate the 6-month rate

The annual rate times the semiannual rate will be equal to the 18 months rate

(1+0.0195)(1+r)=(1.0225)^{3/2}

\frac{1.0225^{3/2} }{1.0195} - 1 = r

r = 0.01416296  = 1.42%

If we want to express it annually:

1.0142^2 - 1 = r  = 2.85%

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6 0
4 years ago
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