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    Assignement

    Uploaded by

    Rezene Kahsay Hagos
    This is prepared by my self

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    © All Rights Reserved
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    Assignement

    Uploaded by

    Rezene Kahsay Hagos
    2 views1 page
    This is prepared by my self

    Original Title

    assignement

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    This is prepared by my self

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2 views1 page

    Assignement

    Uploaded by

    Rezene Kahsay Hagos
    This is prepared by my self

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    1.

    A weekly business magazine offers a 1-year subscription for $58 and a 3-


    year subscription for $116. If you thought you would read the magazine for
    at least the next 3 years, and consider 20% as a minimum rate of return,
    which way would you purchase the magazine: With three 1-year
    subscriptions or a single 3-year subscription? (Answer: Choose the 3-year
    subscription.)
    2. A new alloy can be produced by Process A, which costs $200,000 to
    implement. The operating cost will be $10,000 per quarter with a salvage
    value of $25,000 after its 2-year life. Process B will have a first cost of
    $250,000, an operating cost of $15,000 per quarter, and a $40,000 salvage
    value after its 4-year life. The interest rate is 8% per year com- pounded
    quarterly. Using present value analysis which process should be selected.
    3. An engineering student is deciding whether to buy two 1-semester parking
    permits or an annual permit. The annual parking permit costs $100 due
    August 15th, and the semester permits are $65 due August 15th and January
    15th. What is the rate of return for buying the annual permit?

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