Tom promises to pav Joel $3,000 in three years and another $4,000 three years la
ID: 2727026 • Letter: T
Question
Tom promises to pav Joel $3,000 in three years and another $4,000 three years later for a loan of S5.000 from Joel today. What is the interest rate that Joel is getting? Assume trie interest is compounded monthly. Northshore hospital in Nassau county area bought a diagnostic machine at a cost of $50,000. Maintenance cost is expected to remain constant throughout the life of this machine at $3,000 per year. The salvage value is estimated to be "0" at the end of the useful life of 12 years. Determine the economic life (minimum cost life) of this machine. MARR = 15% Samsung Tech Co. bought a metrology equipment at a cost of $5,000. The maintenance cost schedule for the next 8 years is show in the table below. Determine the value of EUAC of the maintenance costs in year 6. MARR = 10%.Explanation / Answer
Answer 1: Interest rate Joel is getting is 7.31%
Calculations : NPV= 3000 * 1/(1+R)36 + 4000 * 1/(1+R)72 - 5000
On putting R = 10% annually or 0,83% monthly we get NPV = 4434 - 5000 = - 566
and R = 8% annually or 0.66% monthly we get NPV = 4858 - 5000 = -142
thus , calculating we get IRR = 7.309%