Determine the annual cost of ownership for a vehicle that has the following cos Use an interest rate of 6% per year. EOY = End of Year Down Payment = $2700; Annual payments = $6000 from EOY1 - EOY4 Insurance = $1500 per year Gas & Oil Changes = $1400 per year Maintenance = $775 in the first year, increasing $200 every year thereafter Major maintenance = $2200 at EOY5; Replacement tires = $610 at EOY3 and $760 at EOY6 Salvage value = $3000 at EOY9

Determine the annual cost of ownership for a vehicle that has the following cos Use an interest rate of 6% per year. EOY = End of Year Down Payment = $2700; Annual payments = $6000 from EOY1 - EOY4 Insurance = $1500 per year Gas & Oil Changes = $1400 per year Maintenance = $775 in the first year, increasing $200 every year thereafter Major maintenance = $2200 at EOY5; Replacement tires = $610 at EOY3 and $760 at EOY6 Salvage value = $3000 at EOY9

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The maintenance cost in year 1 is $23000, increasing by 7% each year. What is the present worth of this over 9 year period at an interest rate of 13% per year? Select one: O a. 18918.92 Ob. 148735.18 O c.153964.21 O d. 91246.65 O e. 20353.98
A company expects the cost of equipment maintenance to be $5,000 in year one, $5,500 in year two, and amounts increasing by $500 per year through year 10. At an interest rate of 10% per year, the present worth of the maintenance cost is nearest to A.$51,790 B.$42,170 C.$46,660 D.$38,220
Maintenance costs for machine increase by $2,000/year over the 5-year. The initial maintenance cost is $5,000. With interest rate of 8 % annually, find the present worth for the maintenance costs. a. $34712 b. $34720 $34717 d. $34708 O e. $34710
The company buys an asset that costs $11,200 and returns net cash flow of $160 per month for 3 years, followed by $270 per month for 3 additional years. The company financing rate is 10.9% compounded monthly. Find the asset's annualized internal rate of return and net present value. O The IRR and NPV equal 16.69% and $1,860.86 O The IRR and NPV equal 15.69% and $1,960.86 O The IRR and NPV equal 17.69% and $2,060.86 O The IRR and NPV equal 19.69% and $2,160.86
A concrete vibrating equipment will be purchased for a cost of $107,425. After a useful life of 5 years it is assumed the equipment will be sold for $33,450. Assume interest of 7.5% for borrowing money, 4.3% for risk, and 2.2% as the equivalent interest rate fortaxes, insurance, and storage, Calculate the annual ownership cost and the cost per hour assuming the equipment will be used 1920 hr. /yr.
Calculate the annual depreciation and book value of the construction equipment using declining balance method. The interest rate is 8% per year. Co= BD 3,500,000 - Sv = BD 500,000 n = 10 years.
The annual operating and maintenance (0&M) expenses of a company are $195,000 at EOY 1 decreasing by $8,500 per year until EOY 10. If the annual interest rate is 14.75%, what is the future equivalent of the O&M expenses at EOY 10? O a. $3,472,780 O b. $841,643 O c. $4,490,771 O d. $4,349,606 O e. $3,331,614
A property is expected to have net operating income during the first year of $50,000, which is projected to increase at a rate of 4% p.a. over a five-year holding period. The property value is also projected to increase at a rate of 4% p.a. The valuer believes that a 14% discount rate is appropriate. What is the estimated value of the property? Assume rent is paid annually in arrears. $500,000. b. $184,054. a. C. $357,143. d. $292,150.
A company expects the cost of equipment maintenance to be $5,000 in year one, $5,500 in year two, and amounts increasing by $500 per year through year 10. At an interest rate of 10% per year, the present worth of the maintenance cost is nearest to A) $38,220 B $46,660 c) $51,790 D) $42,170
The annual cost of a certain service is $42,000 at EOY 1 which decreases by 5.5% per year for a period of 12 years. If the interest rate is 5.5% per year, what is the present equivalent of the annual cost at the beginning of year 1? O a. $477,725 O b. $295,355 O c. $279,957 O d. $504,000 O e. $262,720
A company purchase a piece of manufacturing equipment for an additional income. The expected income is $4,500 per semester. Its useful ife is 9 years. Expenses are estimated to be $500 semiannually if the purchase price is $44,000 and there is a salvage value of $4,500, what is the prospective rate of return (RR) of this investment? The MARR is 10% compounded semiannually Oa IRR-602% semiannual Oh IRR-3% semiannual ORR-12% semiannual Od IRR-6.23% semiannual
Consider a piece of equipment that initially cost $8,000 and has these estimated annual expenses and MV: End of Annual Year, k Expenses 1 2 3 4 5 6 7 8 5 years 3 years 6 years $3,000 3,000 3,500 4,000 7 years 4,500 5,250 6,250 7,750 If the after-tax MARR is 7% per year, determine the after-tax economic life of this equipment. MACRS (GDS) depreciation is being used (five-year property class). The effective income tax rate is 40%. MV at End of Year $4,700 3,200 2,200 1,450 950 600 300 0