Payment annual

Take the capital cost and spread it as a series of equal annual payments A made at the end of each year over n years. The first payment gains interest over (n — 1) years, and its future value after (n - 1) years is... 

The future worth of the second annual payment after (n - 2) years is... 

Annual Cost or Payment A series of equal annual payments A invested at a fractional interest rate i at the end of each year over a period of n years may be used to build up a future sum of money E These relations are given bv... 

Equation (9-41) represents the future sum of a series of uniform annual payments that are invested at a stated interest rate over a period of years. This procedure defines an ordinaiy annuity. Other Forms of annuities include the annuity due, in which payments are made at the beginning of the year instead of at the end and the deferred annuity, in which the first payment is deferred for a definite number of years. 

A company may use a sinkiug fund in a variety of ways, but the simplest is to pay a fixed amount A at the end of each year to buy and retire bonds until after n years all the bonds have been retired. This annual payment may prove a significant strain on the resources of a company. Failure to make the payment could result in bankruptcy. In the case of income bonds, a company is required only to pay interest when it earns it. 

Land Lease Costs. If there are annual payments for land use, this item of expense is often kept separate from other operating costs, since it does not inflate at the same rate as other costs. If the land is purchased, it cannot be depreciated for tax purposes. 

The calculation of interest is usually based on the outstanding loan amount. For example, semi-annual payments are expected, the amount of the first year s interest (I) would be ... 

The CCE spreads the investment over the lifetime of the measure into equal annual payments with the familiar capital recovery factor. The annual payment is then divided by the annual energy savings to yield a cost of saving a unit of energy. It is calculated using the following formula ... 

Finland None. A choice is made between a prior annual payment, a co-payment, and a co-payment with a maximum in the user-shared bill for the annual cost. Varies according to the municipality Maximum payment levels for (daily) hospital stays and for specialist visits Percentage rates of user sharing in pharmaceutical costs... 

A 15-year fixed-rate mortgage with annual payments saves you nearly 60 percent of the total interest costs over the life of the loan compared with a 30-year fixed-rate mortgage. 

Suppose you are asked to evaluate the purchase of the multicone cyclone referred to in Example 3.4. The capital investment is 35,000 (see Example 3.4), and the equipment has a class life of 5 years, after which it will be sold for the salvage value of 4000. The income stream generated by the machine is on line A in Tables EB.5A and EB.5B. As the equipment ages, its operating and maintenance costs increase, and line B lists the expense profile. Assume a tax rate of 35 percent with no investment tax credit. Evaluate two possible scenarios (a) 100 percent use of equity and (b) 100 percent debt financing. Use straight-line depreciation for debt financing, for simplicity assume equal annual payments (principal plus interest) to the lender for the 5 years at a rate of 10.5%. 

M 49.1 million, plus optional annual payments for 6 years of at least 50 million in lieu of a supply agreement 6 years, 11 months Between 750 million and 1 billion... 

Alternatively, this brand-name eompany could decide to make quarterly payments to the generic applicant instead of fulfilling the supply agreement. The payment sehedule, which continued until expiration of the patent, provided for total annual payments of at least 50 million. 

Assume that the capital for the project is borrowed at 25% interest with a required return on investment of 5 years. Five annual payments are made to the creditors. The calculations made to determine the size of these payments and their repayment schedule are given in Appendix E (Table E.6). The five payments needed are each of AS5.02 million. These will cover both the 25% interest rate and the AS13.5 million principal. Operating and production costs are tax deductible as is the interest on borrowed capital, only gross profit is taxed. In the calculations, the AS5.02 million capital cost term is therefore broken into two components. The first is the tax-free interest component and the second must come from operating profit. This profit is assumed to attract 49% company tax. 

Like other early stage R D alliances, a large fraction of total pre-commercial payments from pharma licensee to biotech licensor in CC alliances comes in the form of R D reimbursement. Such reimbursement is usually negotiated as a minimum annual payment per year (R D/yr), either on a fixed dollar basis or as a function of the number of biotech full-time equivalent scientists (FTEs) expected to conduct the alliance program. In addition, R D reimbursement is usually negotiated for an expected number of years (R D term), although often it is possible for the licensee to cancel R D reimbursement prior to the completion of the R D term. 

Capital expenditures under a mortgage at 15 for 10 years making annual payments of 20 of initial cost for each of the first IQ years... 

Complete fire and allied-coverage insurance for one unit of a plant requires an annual payment of 700 based on an investment value of 100,000. If income taxes over a IO-year period average 30 percent of gross earnings, by how much is the net income, after taxes, reduced during this lo-year period owing to the cost of the insurance ... 

R = uniform annual payments made at end of each year (this is the annual depreciation cost), dollars... 

R =uniform annual payments made in an ordinary annuity, dollars V = original value of a property at start of service-life period, completely... 

In essence, the CRC converts the TCI (a one-time cost) to a series of equal annual payments over the fife of the project. 

Alternatively, the annual payment A required to build up a future sum of money F with a present value of P is given by... 

If the annual payments A have matured to give the same final sum that would have been obtained by investing the principal P at the same interest rate, then... 

The annual operation costs of an outdated environmental control device is 75,000. Under a proposed emission reduction plan, the installation of a new processing system will require an initial cost of 150,000 and an annual operating cost of 15,000 for the first 5 years. Determine the annualized cost for the new processing system by assuming the system has only 5 years (n) operational life. The interest rate (0 is 7%. The capital recovery factor (CRF) or annual payment of a capital investment can be calculated as follows ... 

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