Homework- Engineering Economy
Part I
| 1.) A 100 share of XYZ Co. is estimated to increase in price by 8% a year. If the present price is $15 a share how much should these shares be worth at the end of 5 years? |
| 2.) A project is expected to take two years to complete and at that time be worth $300,000. If money is worth 25% a year, how much can the initial investment be to make the 25% annual return |
| 3.) An individual makes 5 annual deposits of $4,000 that pays 5% a year. One year later the cash deposit interest changes to 7% a year. Four years after the last deposit the money is withdrawn. How much would this be? |
| 4.) NJIT has to replace its police cars every three years. Assume their cost is $20,000 each and have a $3,000 salvage value, at trade in time. How much must the school set aside into a fund 6% annually to be able to have enough money to replace the cars? |
| 5.) $20,000 is spent on an information system to improve productivity of a shipping department. What annual saving has to be realized to recover this expenditure in 5 years if cost of money is 10%-? |
| 6.) How much can be paid for a copyright that produces $15,000 a year in royalty income for 5 years if the purchaser wants to have 20% annual rate of return? |
| 7.) An individual needs $25,000. His bank will lend him the money to be repaid over a 5-year period every six months at an interest cost of 10% a year. What is the amont that has to be repaid every six months? |