The following table shows some cost data for Lin’s Fortune Cookies, which operates in perfect competition. TP AFC AVC ATC MC 1 $ 84.00 $ 51.00 $…
October 13, 2020
When total utility falls, marginal utility is _____.
October 13, 2020
Show all

Engineering Economy ( By G.J Thuesen) MASTERS LEVEL

1. (10 points) A series of twenty-one constant-dollar payments beginning with $5,000 at the end of the first year are growing at a rate of 4% per year. If the inflation-free rate is 3% per year and the inflation rate is 6% per year, find the present equivalent of this series of payments using constant-dollar analysis. The base year is year 0.

2. (20 points) An investor’s projections of future purchasing power needs, based on an estimated inflation rate of 5% per year, are given in the cash flow diagram below.

Connect with a professional writer in 5 simple steps

Please provide as many details about your writing struggle as possible

Academic level of your paper

Type of Paper

When is it due?

How many pages is this assigment?

Available investments are expected to yield 10.25% during the first 6 years and 15.5% during the final 6 years.

a) Use constant-dollar analysis to determine the future worth at year 12 in the same constant dollars specified above (year 6 dollars).

b) How many actual dollars would need to be invested at t = 0 to achieve the projected needs under the expected yield rates?

3. (20 points) A couple takes out a loan for $350,000 to purchase a house. They get an adjustable rate mortgage (ARM) that starts with an interest rate of 3.5% annual compounded monthly with a term of 30 years and they will make monthly payments. After two years the interest rate increases 6.5% annual compounded monthly and two years after that the interest rate increases to 8.5% annual compounded monthly.

a) What are the loan payments for each interest period in this loan?

b) What is the total interest paid on this loan? 

 

“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”

Looking for a Similar Assignment? Let us take care of your classwork while you enjoy your free time! All papers are written from scratch and are 100% Original.