7500 28000800 500300 30004 20Prob. 1 Prob. 2 Prob. 3 Prob. 4 Used truck New truc

7500
28000800
500300
30004
20Prob. 1
Prob. 2
Prob. 3
Prob. 4
Used truck
New truck
First cost
Annual Maintenance
Salvage Value
Service life (yrs)
It will cost $3.25 million installed and ready to operate. They can buy it direct from the manufacturer with a 5% discount for cash. However Alibaba.com Group will sell it to Sleepy Hollow for 20% down and five equal annual payments at 6% interest.
Sleepy Hollow Printing Inc. is actually a very large printing company. Management decided to replace one of their large printing presses.
7500
28000800
500300
30004
20Prob. 1
Prob. 2
Prob. 3
Prob. 4
Used truck
New truck
First cost
Annual Maintenance
Salvage Value
Service life (yrs)
It will cost $3.25 million installed and ready to operate. They can buy it direct from the manufacturer with a 5% discount for cash. However Alibaba.com Group will sell it to Sleepy Hollow for 20% down and five equal annual payments at 6% interest.
Sleepy Hollow Printing Inc. is actually a very large printing company. Management decided to replace one of their large printing presses. The press they want to buy is a Ronald 4 -Hi Tower made by Ronald Weboffset Pvt Ltd.
At what overall interest rate are they equivalent? [7]
A) Setup equations using the Excel functions. Enter the appropriate values. Show these equations here. I want to see expressions such as PC = PV(8%102000). This is only for illustration; it is
specifically incorrect for this problem
. [4]
What amount of money deposited 10 years ago at 7% interest would provide a payment forever of $10000 each year beginning the end of this year? Note that there are two steps to this solution. [33]
What is the value of E which is equivalent to the shown payments at an interest rate of 20%. [4]
Uncle Sam needs a pickup truck. He found two trucks which will suit his needs one is used the other new. He has estimated the respective costs for the two and that is shown below. Which truck should Uncle Sam choose if his minimum attractive rate of return is 6.75% (that is assume that is the interest rate MARR)? Use an Annual Cost approach in your comparison.
State any necessary assumptions
. Use Excel. Here are the two sets of costs:
C) Which truck should he buy? [1]
B) Calculate the Annual Cost for each proposal. [5]
$45
$30
$15
E E E
0 1 2 3
0 1 2 3

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