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:

Foster Parent

A foster parent is an individual or couple who provides a temporary home and care for children whose biological parents are unable to do so.

Material Rewards

Tangible, physical rewards given to individuals for achieving specific goals or desired behavior, often used as a motivational tool in various settings.

Yerkes-Dodson Law

A theory proposing that there is an optimal level of arousal for the best performance on a task: too little or too much arousal can decrease performance.

Physiological Needs

Basic physical or biological needs required for human survival, such as air, water, food, shelter, and sleep, according to Maslow's hierarchy of needs.