Suppose a Machine Costing $12,000 Is to Be Replaced at the End

question 30

Short Answer

Suppose a machine costing $12,000 is to be replaced at the end of 7 years,at which time it will have a salvage value of $6000.In order to provide money at that time for a new machine costing $15,000,a sinking fund is set up into which equal payments are placed at the end of every quarter.If the fund earns 5.6% compounded quarterly,what should each payment be?

---

Definitions:

Behaviors

The behavior or response of a person or group as a result of outside or inside forces.

Self-Efficacy

An individual’s belief in their capacity to execute behaviors necessary to produce specific performance attainments.

Specific Task

A particular piece of work or duty that is assigned or expected to be accomplished.

MBTI

Stands for Myers-Briggs Type Indicator, a psychological assessment tool that categorizes individuals into personality types based on their preferences in perception and decision-making.