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Grandpa would like to deposit some money now for his grandson to have available to beginning withdrawing $18,000 per year for four years, starting 5 years from now. If the money earns 7% interest per year, the amount that Grandpa must deposit is closest to:

The number of time periods that should be used with the F/A factor is equal to:

To find the EUAW of a shifted gradient, find A/G.

The number of time periods that should be used with the P/A factor is equal to:

For a uniform annual series, the future worth is always located in the same period as the last A

To avoid errors in counting the number of periods, you should always:

About a uniform annual series, the present worth is always located:

To find the equivalent uniform annual worth of a cash flow that has both A's and F's convert everything to a P and then find the F.

The first cash flow of a uniform graduate will always be located in the first period.

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Chika Ilonah
Chika IlonahLv10
28 Sep 2019

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Related questions

1 Two sets of cash flows are shown in the table below. If these sets are equal at 8% interest rate, determine the unknown value, X.

Year 0 1 2 3 4 5
Cash Flow, Series I $125 $100 $75 $50 $25 $0
Cash Flow, Series II $X $2X $3X $4X $5X $7X

2 A deposit of $10,000 now at a interest rate of 10% per year will accumulate in 20 years to an amount equal to _______________.

A.

$54,600
B.

$61,500
C.

$67,280
D.

$51,900

3 Which of the following relationships between compound interest factors is not correct?

A.

Single Payment Compound Amount Factor and Single Payment Present Worth Factor are reciprocals.
B.

Sinking Fund Factor and Uniform Series Compound Amount Factor are reciprocals.
C.

Capital Recovery Factor and the Sinking Fund Factor are reciprocals.
D.

Capital Recovery Factor and Uniform Series Present Worth Factor are reciprocals.

4 What is the present worth of a series of ten deposits of $200 per year at 6% made at the end of each year?

A.

$1,672
B.

$1,072
C.

$1,272
D.

$1,472

5 Determine the net present worth (NPW) of the following cash flows using an interest rate of 7%.

Year

0

1

2

3

4

5

6

7

8

Cash Flow,$

-12,000

2,000

2,000

2,000

2,000

2,000

2,500

3,000

3,500

A.$2,771.05

B.$2,500
C.$1,500
D.$1,771.05

6 At Kal Tech Manufacturing Inc, the time required to make the first unit of an engineered product is 64.1 minutes. Determine the time required for 16th unit if the learning curve percentage is 90%.

A.

42.1 minutes
B.

29.53 minutes
C.

36.45 minutes
D.

20.89 minutes

7 A sum of $994.62 deposited at time

  1. 1. What is the capitalized value of an infinite series of $1,000 biennial (every two years) payments? MARR = 10%

    $4,950

    $4,025
    .

    $4,350


    $4,762

    1. 2. Frank West Enterpises would like to choose one of the following plans for expansion. Using present worth analysis, find the best alternative among the three alternatives and the Do-Nothing.

      Alt. A

      Alt. B

      Alt. C

      Initial Cost

      $10,000

      $21,000

      $8,000

      EUAB

      $6,000

      $7,000

      $4,000

      EUAC

      $1,500

      $1,000

      $2,000

      Salvage Value

      $2,000

      $8,000

      $3,000

      Life

      2 Years

      3 Years

      2 Years

      Use a MARR of 10%.

      .

      Do-Nothing
      .

      Alt. C
      .

      Alt. B
      .

      Alt. A

      3.

      1. U. S. Engineering is investigating the possibility of acquiring new automated packaging equipment at a cost of $12,000. It is expected that the equipment will have a salvage value of $1,000 at the end of its useful life of 10 years. It is determined by the plant engineering department at the company that the operation and maintenance cost will be $500 in the first year and will gradually increase every year starting year 2 at the rate of $50 until the equipment is retired. Determine the equivalent uniform annual cost (EUAC) if MARR for the company is 10%.

        $2,575.95


        $2,150.50
        .

        $2,176.60
        .

        $2,184.40

        4.

        1. The cash flows given in table below are for two different alternatives. MARR =10%

          Data

          C

          D

          Initial Cost

          $20,000

          $80,000

          Uniform Annual Benefits

          $6,000

          $10,000

          Salvage Value

          $5,000

          $20,000

          Useful Life in years

          5

          infinity

          The equivalent uniform annual worth (EUAW) of alternative N is ______________.

          Hint: Assume the Salvage Value is never realized since N is infinite.

          $2,000

          $1,920

          $1,762


          $2,476

          5.

          1. Compare the following plans using a MARR of 6%.

            Data

            Plan X

            Plan Y

            Equipment First Cost

            $50,000

            $75,000

            Annual Operation & Maintenance Cost

            $3,000

            $2,500

            Salvage Value

            $10,000

            $0

            Service Life, Years)

            25

            50


            $6,728; $7,255


            $7,255; $9,000
            .

            $6,728; $7,728
            .

            $6,728; $8,200

            6.

            1. LAEP, Inc. wants to evaluate two methods of shipping their products. The following cash flows are associated with each alternative:

              Data

              Method

              A

              B

              Life (Years)

              10

              10

              First Cost

              $700,000

              $1,512,000

              M&O Cost

              $18,000

              $9,000

              M&O Cost Gradient

              $900

              $775

              Annual Benefit

              $154,000

              $303,000

              Salvage Value

              $142,000

              $210,000

              Annual profits are based on amount of products which can ordinarily be shipped each year as a function of the amount of vehicles or service purchased with the first cost and the M&O costs.

              Using a MARR of 15%, calculate the equivalent uniform annual cash flow (EUAB - EUAC) for each alternative.

              Determine the most desirable alternative based on the results.

              $389.57, $445.90; Method A


              $445.90, $389.57; Method A
              .

              $445.90, $389.57; Method B
              .

              $389.57, $445.90; Method B
            7.

            1. For the cash flow diagram shown, which of the following equations properly calculates the uniform equivalent (A)?

              n

              0

              3

              6

              9

              12

              15

              Dollars

              $100

              $100

              $100

              $100

              $100

              $100


              A=100(A/P,i,15)+ 100(A/F,i,3)


              A=100(A/P,i,15)


              A=100(A/F,i,3) + 100(A/F,i,15)


              A=100(A/P,i,3) + 100(A/F,i,3)
              8.

              1. Three different alternatives shown in table below are being considered by U. S. Engineering systems.

                Assume that alternatives X and Z are replaced at the end of their lives.

                Data

                Alternative X

                Alternative Y

                Alternative Z

                Initial Cost

                $6,000

                $1,000

                $1,500

                Uniform Annual Benefits

                $810

                $125

                $ 230

                Useful Life in Years

                20

                infinite

                10

                MARR

                12%

                The NPW for alternative

This question is a bit hard. Assume a market with many individuals who trade goods. The number of goods available for trade grows as time evolves. In the first period, there is only one good to trade, in the second period, two goods, and so on (obviously in the Nth period there are N goods). Suppose that the market arrangement (and preferences of individuals) is such that the probability an individual engages in trading is inversely proportional to the number of goods: if there is only one good, the probability of trading is 1; if there are N goods, the probability of trading is 1/N. The payoff if an individual trades is 1 and if she does not, the payoff is zero. Suppose that individuals can create a monetary system every period for which they all have to pay a cost equal to 0 < x < 1. This system, however, raises the probability of trading for all individuals to 1 irrespective of the number of goods available in the market. After how many periods will individuals in this market decide to pay for this monetary system? Note that individuals decide whether to pay for the monetary system before they look for trades. (Hint: what is the expected payoff for a given individual if there is no money? How about if there is money? At which point are these equal?). This question is a bit hard. Its purpose is to make you think somewhat more deeply about the role of money as medium of exchange

P.S. I know the answer to this question (find it below), however I am looking for a response that shows/demonstrates how one comes to the conclusion. SOLVE THIS ANSWER YOURSELF, show that work, THEN explain how/why that is the answer. Please show your work.

ANSWER TO THE QUESTION I POSTED ABOVE: Individuals in this market will decide to pay for this monetary system at a point where expected payoff fr a given individual if there is no money and if there is money become equal. therefore when X = 1/n, the individuals will decide to introduce monetary system where X is the cost of creatingmonetary system and n is number of goods.

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