1. The first cost of a bridge that is expected to have an infinite life is $10 million. The maintenance cost of the bridge will be $150,000 per year. At an interest rate of 10% per year, the annual worth of the bridge is equal to:
a. $3,200,000
b. $1,000,000
c. $1,150,000
d. $850,000
2. When calculating the i* value, all the net positive cash flow are assumed to be reinvested at:
a. The current market interest rate
b. The i* rate
c. The company's MARR
d. The company's cost of capital
3. If you have the present worth of an alternative with a 5-year life, you can obtain its annual worth by:
a. Multiplying the PW by i
b. Multiplying the PW by (A/F, i, 5)
c. Multiplying the PW by (P/A, i, 5)
d. Multiplying the PW by (A/P, i, 5)
4. If you have the capitalized cost of an alternative that has an infinite life, you can get its annual cost over a very long number of years by:
a. Multiplying the capitalized cost by i
b. Multiplying the capitalized cost by (A/F,i, n)
c. Dividing the capitalized cost by (P/A, i,n)
d. Dividing the capitalized cost by i
5. An investment of $85,000 resulted in uniforms income of $15,000 per year for 15 years. The rate of return of the investment is equal to:
a. 10.6%
b. 15.6%
c. 13.7%
d. 23.5%
1. The first cost of a bridge that is expected to have an infinite life is $10 million. The maintenance cost of the bridge will be $150,000 per year. At an interest rate of 10% per year, the annual worth of the bridge is equal to:
a. $3,200,000
b. $1,000,000
c. $1,150,000
d. $850,000
2. When calculating the i* value, all the net positive cash flow are assumed to be reinvested at:
a. The current market interest rate
b. The i* rate
c. The company's MARR
d. The company's cost of capital
3. If you have the present worth of an alternative with a 5-year life, you can obtain its annual worth by:
a. Multiplying the PW by i
b. Multiplying the PW by (A/F, i, 5)
c. Multiplying the PW by (P/A, i, 5)
d. Multiplying the PW by (A/P, i, 5)
4. If you have the capitalized cost of an alternative that has an infinite life, you can get its annual cost over a very long number of years by:
a. Multiplying the capitalized cost by i
b. Multiplying the capitalized cost by (A/F,i, n)
c. Dividing the capitalized cost by (P/A, i,n)
d. Dividing the capitalized cost by i
5. An investment of $85,000 resulted in uniforms income of $15,000 per year for 15 years. The rate of return of the investment is equal to:
a. 10.6%
b. 15.6%
c. 13.7%
d. 23.5%
Related textbook solutions
Related questions
Volusia County has two alternatives for a traffic light in an excluded area. Alternative A is to install an electrically powered traffic light, while alternative B is to install a solar-powered traffic light. The initial cost, the annual operating cost is provided in the following table. With MARR 10% and over a period of 5 years, which alternative should be selected?
|
Estimate |
Electrical Powered |
Solar-powered |
|
Initial Cost |
$2,500 |
$6,000 |
|
Annual Operating Cost |
$900 |
$50 |
|
Number of Periods |
5 |
5 |
Alternative A has a first cost of $20,000, an operating cost of $9,000 per year, and a $5,000 salvage value after 5 years. Alternative B will cost $35,000 with an operating cost of $4,000 per year and a salvage value of $7,000 after 5 years. At a MARR of 12% per year, which should be selected?
What is the capitalized equivalent cost of a dam that will cost $25 million now and will require $2 million in maintenance annually? The effective annual rate is 12%.
How many dollars would be required today to purchase an item that increased in cost by exactly the inflation rate if the cost 30 years ago was $1000 and inflation was 4% per year?
A certain machine will have a cost of $25,000 (then $) six years from now. Find the PW of the machine if the real interest rate is 10% per year and the inflation rate is 5% per year using (a) constant-value dollars, and (b) then-current dollars.
