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Showing posts with the label 2013

2013//5(a)//Engineering Eco//KU

A special purpose machine is to be depreciated as a linear function of use. It costs $25,000 and is expected to produce 100,000 units and then be sold for $5,000. Up to the end of the third year, it has produced 60,000 units, and during the fourth year it produced 10,000 units. What is the depreciation for the fourth year and the BV at the end of the fourth year? <script data-ad-client="ca-pub-6961440633287036" async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js"></script> 

2013//4(a)//Engineering Eco//KU

A small company purchased now for $23,000 will lose $1,200 each year for the first four years. An additional $8,000 invested in the company during the fourth year will result in a profit of $5,500 each year from the fifth year through the fifteenth year. At the end of 15 years, the company can be sold for $33,000. i. Determine the IRR. ii. Calculate the FW if MARR = 12%

2013//3(b)//Engineering Eco//KU

Suppose that annual income from a rental property is expected to start at $1,300 per year and decrease at a uniform amount of $50 each year after the first year for the 15-year expected life of the property. The investment cost is $80,000, and rate of interest is 9% per year. Is this a good investment? Assume that the investment occurs at time zero (now) and that the annual income is first received at end-of-year one.

2013//3(a)//or//Engineering Eco//KU

Larry Brin, a 22 year-old and newly hired information technologist decides to invest $4,500 (10% of his annual salary) in a mutual fund earning 7% per year. He will continue to make annual deposits until he retires at age 62 (i.e., 40 years after he started his job). He expects his salary to increase by an average of 4% each year during this time. How much money will Larry have accumulated in his mutual fund when he retires?

2013//3(a)//Engineering Eco//KU

<script data-ad-client="ca-pub-6961440633287036" asyncsrc="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js"> </script> Maintenance costs for a small bridge with an expected 50-year life are estimated to be $10,000 each year for the first 5 year, followed by $10,000 expenditure in the year 15 and a $10,000 expenditure in the year 30. If i = 10% per year, what is the equivalent uniform annual cost over the entire 50-year period?

2013//2(c)//Engineering Eco//KU

A man deposited $10,000 in a savings account when his son was born. The nominal interest rate was 8% per year, compounded continuously. On the son’s 18th birthday, the accumulated sum is withdrawn from the account. How much will this accumulated amount be?

2013//2(b)//Engineering Eco//KU

Suppose that you have just borrowed $7,500 at 12% nominal interest compounded quarterly. What is the total lump-sum, compounded amount to be paid by you at the end of a 10-year loan period?

2013//2(a)//Engineering Eco//KU

The Dell Corporation borrowed $10,000,000 at 7% interest per year, which must be repaid in equal EOY amounts (including both interest and principal), over the next six years. How much must Dell repay at the end of each year? How much of the total amount repaid is interest?

2013//1(b)//Engineering Eco//KU

An engineering consulting firm measures its output in a standard service hour unit, which is a function of the personnel grade levels in the professional staff. The variable cost is $62 per standard service hour. The charge-out rate (i.e., selling price) is $85.56 per hour. The maximum output of the firm is 160,000 hours per year, and its fixed cost is $2,024,000 per year. What is the breakeven point in standard service hours and in percentage of total capacity?