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# It is estimated that a certain piece of equipment can save \$22000 per year in labor and materials costs The equipment has an expected life of five years and no market value If the company must earn

It is estimated that a certain piece of equipment can save \$22,000 per year in labor and materials costs. The equipment has an expected life of five years and no market value. If the company must earn a 15% annual return on such investments, how much could be justified now for the purchase of this piece of equipment? Draw a cash-flow diagram from the company's viewpoint. A 45-year-old person wants to accumulate \$750,000 by age 70. How much will she need to save each month, starting one month from now, if the interest rate is 0.5% per month? The cost to equip a large cruise ship with security cameras is \$500,000. If the interest rate is 15% per year and the cameras have a life of six years, what is the equivalent annual cost (A) of the security cameras? You have just inherited \$100,000 as a lump-sum amount from your distant aunt. After depositing the money in a practically risk-free certificate of deposit (CD) earning 5% per year, you plan to withdraw \$10,000 per year for your living expenses. How many years will your \$100,000 last in view of these withdrawals?

Apr 08 2020 View more View Less