Value Design
fahad987
engr3200_value_design_-summer_2015-test_1.docx
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1. Costs for maintenance of buildings at an industrial complex are expected to be $1,000 in year three, $1,200 in year four and amounts increasing by $200 per year thereafter through year nine. At an interest rate of 10% per year, find the present worth of the expenditures using arithmetic gradient formulas.
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3. An investment of $1,000 per year in years four through ten is equivalent to a single investment in year eleven at an interest rate of 10% per year. Find this value. |
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4. Payments of $1,000 in year two and $4,000 in year five are equivalent to uniform payments in years three through seven at an interest rate of 10% per year. Find the amount of those payments |
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5. The bond has been purchased for 15,000 dollars. It is a 25-year bond with a $20,000 face value and 8% coupon rate (with interest paid semiannually)? The bond will be kept to maturity. The effective interest rate for MARR rate is 10% per year compounded annually. Should the investor buy the bond. Why?
6. Problems 6 through 7 are based on the following statement:
The data for new and used machines are shown below:
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Used machine |
New machine |
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Initial cost($) |
15,000 |
40,000 |
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Annual operating cost ($/year) |
8,000 |
2,000 |
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Salvage value ($) |
5,000 |
10,000 |
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Life (years) |
3 |
6 |
Use an interest rate of 10% per year.
The present worth of the new machine is equal to?
7. To compare the machines on the basis of a present worth analysis, calculate the present worth of the machines. Which machine you will pick? Why?
8. For an 8%, $10,000 bond with interest payable quarterly, find the amount and frequency of the payments.
