A construction company needs to buy a bulldozer.  The stated price for the bulldozer is $41,000.  The manufacture of the bulldozer offers a financing plan with 20% down and quarterly payments for 5 years at 8% APR.  Alternately, the company can pay cash, and will receive a 10% reduction in price for the cash sale.  To determine the effective annual rate (true rate of the loan considering the cash option)  of using the financing plan, which of the following steps is NOT correct?

A bank advertises that a savings account pays 6% compounded semi-annually.  6%

A restaurant purchased some new major appliances for the kitchen.  No payments are to be made in the first year after installation.  Then monthly payments must be made for three years.  When determining the present worth of the payment cash flows they would be treated as a deferred annuity.

If a company has to pay to have a piece of purchased equipment hauled off at the end of a project’s life, the associated cash flow will show as a positive value in an EAW calculation.

Cost that have been incurred or dollars that have already been spent or committed are known as

Typically, there are two alternatives in a replacement analysis. One alternative is to replace the defender now. The other alternative is which of the following?

$12,000 is invested with an effective interest rate is 6% per year. How much money is in the account after 8 years?

Compute the EAW of medical equipment a profitable hospital is considering buying. The I.E at the hospital has assembled the following data. MARR of 15%. Cash flow Initial cost $100,000 Operating costs /year $50,000 Annual revenue $100,000 Major overhaul at the end of year 5 $40,000 Salvage value $10,000 Useful life 10 years

A cost that stays the same regardless of the level of activities or number of units made is known as

The internal rate of return for the following cash flows is approximately Year Cash Flow 0 -$100,000 1 25,000 2 25,000 3 25,000 4 25,000 5 25,000 6 25,000