Latihan Soal UTS & UAS

1-In a housing project the following sequence of events occurs. At the start of the project (time zero), land is bought at $1,000,000 Two months later, $100,000 is paid to the architect for preparing the design In month 4, construction is started and the cost of construction (labor and material) is $150,000 per month Every month, one house is built (a total of 12 houses); the first one is ready for sale in month 6 During every month starting from month 8, one house is sold for a price of $150,000 each After all of the houses are built and before all are sold, the cost of maintaining the site is $10,000 per month Draw the cash flow diagram. 2-A credit card company announces that its interest rate is 1.5% per month. What is the corresponding effective annual interest rate? 3-Your local bank has a promotional saving program that pays an interest rate of 6% per year compounded monthly. If you deposit $1,000 on January 1 in this bank, how much will you have in your account at the end of year 1 and year 2? 4- Mr. X deposited $1,500 in a savings account at the local bank and went on assignment overseas. After two years, he returned and noticed he had $1,800 in his account. What annual effective rates of interest had the bank given him if they compounded the interest quarterly? What if they compounded annually? 5- The local bank advertised an investment program with an annual 16% interest rate, compounded quarterly. You can also choose to invest your money at the local branch of an out-of-town bank that will give you an annual interest rate of 17.5%. How much more will you gain or lose per year if you invest $1,000 at the local bank instead of at the out-of-town bank? 6-Mr. "X", a friend of yours, is asked to invest in the following project: Installation and operation of a facility with a life span of five years. The initial investment is $90M. It will have a net profit of $25M/Yr the first two years and $30M/Yr in years 3,4, and 5. At the end of year 5, it has to be disposed of at a cost of $10M with no resale value. If he has the money and his opportunity cost of money is 10% (i=10%), would you advise him to invest or not? Yes? No? Why? Explain. 7-Hosbol Corporation has purchased a system for $1 million. The net income from operating this system is $300,000 per year. Assuming a life of five years and no salvage value, what is the Net Present Worth (NPW) of this system (i=10%)? 8-Production equipment is bought at an initial price of $10,000. The annual operation and maintenance cost is $100. The salvage value at the end of the 15-year life is $500. Using MARR of 10%, calculate the net present worth. Another model of the equipment with the same initial price and annual cost brings in an income of $1,100 per year but has no salvage value at the end of its 15year life. As an investor, would you invest in a or b? Why? 9-Board members at Darbol Corporation received two proposals for a machine they may want to purchase. They also can choose to invest their capital and receive an interest rate of 15% annually.

Using the following data about the machine, what is their most economical course of action? Use the net present worth method. Data Initial Cost Salvage Value Annual Benefit Annual Cost Life Machine A $180,000 $40,000 $75,000 $21,000 5 years Machine B $240,000 $45,000 $89,000 $21,000 10 years

10-A developer is given the following two options for the purchase of a property: a. Pay $100,000 b. Pay $30,000 at the end of each year, starting one year after purchase, for the next five years. Which option should he take? i=10% 11-You have the option of choosing between the following two projects. a. Initial investment $700K, annual income $400K b. Initial investment $ 1,600K, annual income $600K The life of project a is five years and that of project b is ten years. If you have a MARR of 30%, which one of the projects should you accept? 12-A successful physician has invested $800,000 cash in a rental apartment house. If he has a MARR of 10%, how much should he charge for rent per month to recover his investment in 10 years? 13-Mr. and Mrs. Smith, who both work for a national retail chain, purchased a house with a price of $400,000. They paid a down payment of $40,000 using their savings and took a 30-year loan from the local bank at an interest rate of 9% per year. What is their monthly payment? After living five years in this house, they were transferred by their employer to another division in a different state, and they wanted to sell the house. a. How much of the principal is left at the end of the fifth year? b. If their MARR is 10%, what should be their minimum asking price for the house? 14-Darbol Corporation received two investment proposals. The estimate of the financial situation of each proposal is presented in the following table. Darbol also has the choice of investing the capital and receiving an interest rate of 15% annually. Using the EUAW method, perform the financial analysis and make your recommendation as to which of the proposals, if any, they should accept. Data Proposal A Proposal B Initial Cost $50,000 $140,000 Salvage Value $20,000 $30,000 Annual Benefit $30,000 $40,000 Annual Cost $15,000 $10,000 Life 3 years 6 years