How large is the difference between future values

Reference no: EM131003084

1. How large is the difference between future values with simple and compound interest if N = 20 years, i = 5%, and P = $24? Suppose this is the $24 Peter Minuit paid for the rights to Manhattan Island in 1626; what are the corresponding values in 2006?

2. Ernie's Earthmoving is considering the purchase of a piece of heavy equipment. What is the cash ?ow diagram if the following cash ?ows are anticipated?

• First cost $120K
• O&M cost $30K per year
• Overhaul cost $35K in year 3
• Salvage value $40K after 5 years

Reference no: EM131003084

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