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What is the equivalent uniform annual cost of erecting a fence with an initial cost of $7 million that decreases by $500,000 each year, over 5 years at an interest rate of 10%?
What is the total cash inflow from fees for services rendered at Anderson and Dyess Design-Build Engineers?
If an engineer borrows P60,000 and makes equal annual repayments for 5 years at an 8% interest rate, what type of financial calculation is performed to determine the annual payment amount?
What will be the present worth of P30,000 received in year 8 at an interest rate of 10%?
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What is the annual cost the Kennywood amusement park can afford to invest now in new technology to replace $75,000 annual consulting with $30,000?
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To withdraw $4,000 per year for state tuition starting 3 years from now, what is the nature of the investment the father should make 2 years from now?
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What type of cash flow diagram should be constructed for a cash outflow of $10,000 at time zero followed by annual inflows?
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What kind of financial analysis would best apply when determining the adequacy of $30,000 versus the previous $75,000 spent annually at Kennywood amusement park?
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What is the present worth of a uniform series of 10 payments of P6000, beginning one year from now, if the interest rate is 10% per year?
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What annual savings is needed for Gentech technologies to recover their P12.7 million investment over 8 years at a 20% return?
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If Hewlett-Packard saves $50,000 this year, what is the equivalent value of this amount after 5 years at a 20% interest rate?
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For a loan of $20 million with a repayment term of 6 equal annual payments at 10% interest, what is the amount of each payment?
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What is the present value 3 years earlier for Hewlett-Packard's maintenance savings of $50,000 at a 20% interest rate?
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How much must Sansotech save each year for 4 years to recover its investment of $225,000 at a 15% minimum attractive rate of return?
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In the cash flow diagram, if there is a $10,000 outflow at time zero, which of the following correctly represents the inflow from years 1 to 5?
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What would be the cost of recalls per year before Sansotech's software purchase if the company recovers its investment exactly in 4 years from a 10% reduction?
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How much must the company set aside each year to reach P50,000 in three years at an interest rate of 20% per year?
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What is the equivalent amount now if the total contract price is P2,100,000 payable two years from now at an interest rate of 10%?
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How much must PCM Thermal Products save each year to recover P3.25 million in 6 years at a 15% interest rate?
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What annual amount can Tesla-Sino Inc. spend instead of P850,000 due in five years at an 18% interest rate?
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What is the total present worth of jet fuel options if the market price was P0.50, P0.60, and increased by P0.10 through year 5?
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What is the present worth of a cost increasing by 2% per year at an interest rate of 10% over five years starting from P23,000?
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What is the interest charged at the end of the second year for a P6 million loan with P900,000 interest in the first year and compounded interest?
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What is the total current cost of purchasing land and building for a business that will need it in 5 years?
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Study Notes
Present Worth of Uniform Series
- The present worth of a uniform series of payments is the value of all the future payments at the present time.
- The formula for calculating the present worth of a uniform series is:
- Present Worth = Payment Amount * (1 - (1 + i)^-n) / i
- where "i" is the interest rate per period and "n" is the number of periods.
Cash Flow Diagrams
- A cash flow diagram is a visual representation of the timing and amount of cash flows over time.
- Cash inflows are represented by arrows pointing upwards, and cash outflows are represented by arrows pointing downwards.
Economic Analysis
- Economic analysis is the process of evaluating the financial viability of a project or investment.
- It involves considering the costs, benefits, and risks associated with the project.
Time Value of Money
- The time value of money is the concept that money today is worth more than the same amount of money in the future.
- This is because money can be invested and earn interest, so it will grow in value over time.
Interest Rates
- Interest rates are the cost of borrowing money.
- They are expressed as a percentage of the principal amount borrowed.
Equivalent Annual Cost
- Equivalent annual cost (EAC) is the annual cost of owning and operating an asset over its life, including the cost of capital.
- It can be used to compare different assets with different lifespans.
Cash Inflow and Outflow
- Cash Inflow: Represents money coming into a business or individual.
- Cash Outflow: Represents money going out of a business or individual.
Loan Repayment
- Loan Repayment: The process of paying back a loan, usually in installments.
- The amount of each repayment includes the loan's principal, interest charges, and any fees.
- The interest rate is the cost of borrowing money.
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Description
This quiz explores the concept of present worth in uniform series of payments. It covers related topics like cash flow diagrams, economic analysis, and the time value of money. Test your understanding of financial principles and calculations.
