Question

Five years from now, the Peoria Turnpike Authority will have to spend $25 million to upgrade...

Five years from now, the Peoria Turnpike Authority will have to spend $25 million to upgrade all of its E-ZPass® toll booths. If 15 million vehicles per year use the turnpike, how much additional toll must they charge per vehicle over the next 5 years to have enough money for the upgrade? Assume an interest rate of 6% per year. You must draw a correct cash flow diagram

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1. Annual charge per vehicle = Total cash to be collected per Annum / # Vehicles = 4434910.01 / 15000000 = $0.2955

The company has to charge $0.30 per vehicle to achieve the goal of $25 million in 5 years

*Please comment if you face any difficulty and please don't forget to provide positive rating*

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Using Excel: Your goal is to have $5,000 in five years from now, and your mother...
Using Excel: Your goal is to have $5,000 in five years from now, and your mother help to get started and give you $500 now. From your income you plan to make five additional deposits, one at the end of each year. The first deposit from your money is made at the end of the first year. If you deposit the money in a bank that pays 7% interest, how much must your annual deposit be.
How much money would have to be deposited every quarter, beginning 3 months from now, if...
How much money would have to be deposited every quarter, beginning 3 months from now, if a company wanted to have $75,000 at the end of 3 years? Assume the interest rate is 11% per year, compounded annually. Draw cash flow diagram
The State of DeNile built a new toll road 3 years ago for $900 million. The...
The State of DeNile built a new toll road 3 years ago for $900 million. The state can charge tolls on the road for the next 20 years and expects to spend $3 million per year on maintenance and toll collection. Toll revenue is expected to be $80 million per year. The state has recently received an offer from the Otto Corporation to lease the road for 20 years. The company will pay DeNile $1 billion and will receive exclusive...
You plan to retire 37 years from now. You expect that you will live 25 years...
You plan to retire 37 years from now. You expect that you will live 25 years after retiring. You want to have enough money upon reaching retirement age to withdraw $110,000 from the account at the beginning of each year you expect to live, and yet still have $2,500,000 left in the account at the time of your expected death (62 years from now). You plan to accumulate the retirement fund by making equal annual deposits at the end of...
Argentina is considering constructing a bridge across the Rio de La Plata to connect its Northern...
Argentina is considering constructing a bridge across the Rio de La Plata to connect its Northern coast to the Southern coast of Uruguay. If this bridge is constructed, it will reduce the travel time from Buenos Aires, Argentina to Sao Paulo, Brazil by over 10 hours, and has the potential to significantly improve the flow of manufactures goods between the two countries. The cost of the new bridge, which will be longest bridge in the world and span over 50...
Durban Moving and Storage wants to have enough money available 5 years from now to purchase...
Durban Moving and Storage wants to have enough money available 5 years from now to purchase a new tractor-trailer. If the estimated cost will be $240,000, how much should the company set aside each year if the funds earn 6% per year? The company should set aside $  each year.
You believe that you will spend $50,000 a year for 25 years once you retire in...
You believe that you will spend $50,000 a year for 25 years once you retire in 40 years. For this purpose, you make annual payments into a savings plan (the same amount each year until your retirement). If the interest is 5% per year, (a) How much money will you have for your retirement spending when you retire? (b) How much must you save each year to meet your retirement goal?
You believe that you will spend $50,000 a year for 25 years once you retire in...
You believe that you will spend $50,000 a year for 25 years once you retire in 40 years. For this purpose, you make annual payments into a savings plan (the same amount each year until your retirement). If the interest is 5% per year, (a) How much money will you have for your retirement spending when you retire? (b) How much must you save each year to meet your retirement goal?
You plan to retire 34 years from now. You expect that you will live 22 years...
You plan to retire 34 years from now. You expect that you will live 22 years after retiring. You want to have enough money upon reaching retirement age to withdraw $140,000 from the account at the beginning of each year you expect to live, and yet still have $2,500,000 left in the account at the time of your expected death (56 years from now). You plan to accumulate the retirement fund by making equal annual deposits at the end of...
3-part question. Five years from now you would like to have $25,000 for a down payment...
3-part question. Five years from now you would like to have $25,000 for a down payment on a home. Assuming you could earn 9% interest, how much money would you need to invest today as a lump sum to meet your goal? How much money would you have to invest at the end of each year to meet your goal? How much would you need if you invested the payments at the beginning of each year with the first payment...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT