1. The construction cost of a permanent park is $600,000. Annual maintenance and operation costs are $120,000 per year. At an interest rate of 10% per year, the capitalized cost of the park is nearest to:
2. At an interest rate of 10% per year, the capitalized cost of an expenditure of $1,000 per year is nearest to:
3. Expenses for water treatment at a state park are expected to be $60,000 now, $25,000 in year one, and $10,000 per year thereafter forever. At an interest rate of 8% per year, the capitalized cost of the treatment is nearest to:
4. An expenditure for maintaining a bridge occurs in five-year cycles. If the cost is $100,000 now and $100,000 every five years forever, the capitalized cost of this expenditure at 10% per year is nearest to:
5. A permanent historic monument has a first cost of $20,000 with a maintenance cost of $2,000 every three years. At an interest rate of 10% per year, the annual worth of the monument is nearest to:
6. At an interest rate of 6% per year, the annual worth of an expenditure of $10,000 now, and $10,000 every 5 years forever, is nearest to:
7. The annual payment on a $1,000 loan over a four-year period at 10% per year interest is $315.42. The unrecovered balance immediately after the first payment has been made is nearest to:
8. For the net cash flow sequence of -$10,000 in year zero, +$3,000 in year one, -$2,000 in year two, +$8,000 in year three, and +$6,000 in year four, the number of possible rate of return values is:
9. If a company invests $10,000 and receives $2,775 per year for five years, the rate of return on the investment is nearest to:
10. Alternative A has a first cost of $10,000, an annual operating cost of $5,000 and a salvage value of $2,000. Alternative B has an initial cost of $25,000, an annual operating cost of $1,000 and a salvage value of $12,000. If both alternatives have a five-year life, the equation that will yield the rate of return on the incremental investment is: (what is an equation?)
11. Alternative X has a first cost of $5 million and an annual maintenance cost of $200,000. Alternative Y has a first cost of $7 million, a maintenance cost of $40,000 and periodic expenditures of $100,000 every five years. If both alternatives have infinite lives, the equation that will yield the rate of return on the incremental investment is: (what is an equation?)
12. A manufacturing process has fixed costs of $20,000 per year with variable costs of $15 per unit. If the company sells each unit for $20, the number of units that must be sold each year in order to reach breakdown is nearest to:
13. A specified part can be obtained by either of two methods. Method A will have fixed costs of $40,000 per year and a variable cost of $20 per unit. Method B will have fixed costs of $60,000 per year and a variable cost of $15 per unit. The number of units that must be produced each year for the two methods to be equally attractive is closest to:
14. Fixed costs for manufacturing a certain product are $25,000 per year. Variable costs are $5 per unit. The product can be purchased from another manufacturer for a flat rate of $10 per unit. The number of units that must be used each year in order for the manufacture and purchase alternatives to breakeven is closest to: