Ask Question
13 January, 23:56

TheTerraMaxtruck currently being manufactured and field tested by Oshkosh Truck Co. is a driver - less truck intended for military use. Such a truck would free personnel for non-driving tasks such as reading maps, scanning for roadside bombs, or scouting for the enemy. If such trucks would result in reduced injuries to military personnel amount - ing to $15 million three years from now, determine the present worth of these benefits at an interest rate of 10% per year compounded semiannually.

+3
Answers (1)
  1. 14 January, 01:09
    0
    Present value of the benefits = $6,240,000

    Explanation:

    Annual interest Rate given = 10%

    Semi-annual Interest Rate = 10%/2 = 5%

    Df @ 5% for 6 semi-annuals : (1+r/2) ^-m * n

    = (1 + 0.05) ^ - 18

    = 0.416

    Present Value of the benefits = 0.416 x $15,000,000

    = $6,240,000

    Hence, the present value of the benefits of this saving is $6,240,000.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “TheTerraMaxtruck currently being manufactured and field tested by Oshkosh Truck Co. is a driver - less truck intended for military use. ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers