a) A compnay signs a contract with a supplier to buy $2M worth of services now to be followed by 10 more. What is the present worth of the contract, assuming a MARR of 7%? Answer in millions of dallars
b) A 6% coupon rate bond has a face value of $1,000, pays interest semi-annually and matures in 10 years. If the current market rate is 8%, compounded semi-annually, what is the bond's value today?
c)A company wants to set up a perpetual care fund to cover future expenses for 75 years expenses for 75 years. The initial cost is $5,000 and routine maintenance will cost $200 per year. Every 5thyear, a major cleaning must be done, at an extra cost of $300. The bath is to be demolished after 75 years, with the last $500 covering the demolition costs. If the MARR is 8%, what is the capitalized cost of this project?
d) A B C D
Cost 75K 50K 15K 90K
Annual Benefit 18.8K 13.9K 4.5K 23.8K
Each alternative has a five-year useful life, no salvage value and the MARR is 10%. What is the best option, using Payback? Answer in years to 1 decimal place
P.S Please show me the full solution too Thank you.
a) A compnay signs a contract with a supplier to buy $2M worth of services now to be followed by 10 more. What is the present worth of the contract, assuming a MARR of 7%? Answer in millions of dallars
b) A 6% coupon rate bond has a face value of $1,000, pays interest semi-annually and matures in 10 years. If the current market rate is 8%, compounded semi-annually, what is the bond's value today?
c)A company wants to set up a perpetual care fund to cover future expenses for 75 years expenses for 75 years. The initial cost is $5,000 and routine maintenance will cost $200 per year. Every 5thyear, a major cleaning must be done, at an extra cost of $300. The bath is to be demolished after 75 years, with the last $500 covering the demolition costs. If the MARR is 8%, what is the capitalized cost of this project?
d) A B C D
Cost 75K 50K 15K 90K
Annual Benefit 18.8K 13.9K 4.5K 23.8K
Each alternative has a five-year useful life, no salvage value and the MARR is 10%. What is the best option, using Payback? Answer in years to 1 decimal place
P.S Please show me the full solution too Thank you.
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