Purchase a piece of equipment

Reference no: EM13692665

A company can purchase a piece of equipment for $1300 today or they can pay for it over a fiver year period with the following schedule: Year 1-$100, Year 2-$200, Year 3-$300, Year 4-$400, Year 5-$500. If the cost of money is 6% per year what is the difference between the present worth of the direct purchase and the payment over time (e.g. PW direct purchase-PW time payment=?) Please show all work and not just final answer, i will not rate if no work is shown

Reference no: EM13692665

Questions Cloud

Determine a1 and a2 for approximating polynomial : Determine a1 and a2 for the approximating polynomial and the percentage errors at x=0.5 and x=0.7 compared to the exact solution of u = 4(e(-2x)-1)+8x

What is your breakeven price : In early 2008, you purchased and remodelled a 120-room hotel to handle the increased number of conventions coming to town. By mid-2008, it became apparent that the recession would kill the demand for conventions.

What is average variable cost and marginal cost : Suppose that a firm is currently employing 10 workers, the only variable input, at a wage rate of $100. The average physical product of labor is 25, the last worker added 10 units to total output, and total fixed cost is $5,000.

What is the maximum amount the money supply can increase : What is the maximum amount the money supply can increase, assuming this bank is the only bank in the system that has excess reserves? An individual deposits a $750,000 check into the bank. That individual had just converted foreign currency into doll..

Purchase a piece of equipment : A company can purchase a piece of equipment for $1300 today or they can pay for it over a fiver year period with the following schedule: Year 1-$100, Year 2-$200, Year 3-$300, Year 4-$400, Year 5-$500.

What price of food in terms of manufactures : Country A has 2000 units of labor and can produce two goods, manufactures and food. A’s producers take 2 units of labor to produce one unit of manufactures and 5 units to produce one food unit. Country B has 2500 units of labor and takes 5 units of l..

Suppose that the production function for a commodity : Suppose that the production function for a commodity is given by Q = 10 ?LK Where Q is the quantity of output, L, is the quantity of lavor, and K is the quantity of capital.

Liquidity constraint to liquidity constraint : Suppose an economy goes from no liquidity constraint to liquidity constraint. What will happen to fiscal policy power to change the level of income?

Annual cash flow analysis : One of two mutually exclusive alternatives must be selected. Alternative A cost $30,000 now for an annual benefit of $8450. Alternative B costs $ 50,000 now for an annual befneit of ?14,000 using a 15% nominal interest rate compounded continuously wh..

User Account

All Pages