- A sports mortgage is a creative way to fund cash-strapped sports teams by encouraging fans to sign up to pay a “mortgage” for the opportunity to buy good seats at football games for many decades with season tickets locked in at present prices. The locked-in price span at Notre Dame is 50 years. If a fan currently pays a “mortgage” premium of $130,000 (i.e. in year 0) while season tickets sell for $290 each, what is the corresponding average cost of football tickets at an interest rate of 8 percent per year throughout the 50-year period?
- Has he saved his investment and made a return of 12 percent per year? (b) What is the AW at 12 percent per year if the annual M&O cost was $10,000 in the first year and increased by a constant $1000 per year? Assume that the salvage of $50,000 was realized.
- For the evaluation and construction of three-sided manned towers and three- and four-sided self-supporting towers, a new structural modeling software package is available. It will cost $6000 a year for a single-user license. A site license has a $22,000 one-time fee. A structural engineering consulting firm is trying to decide between two options: purchase a single-user license now and one for the next 3 years per year (which would include 4 years of service), or purchase a site license now. Determine which policy should be followed using the annual value method of assessment at an interest rate of 10 percent every year over a 4-year planning period.
- Chiapas State, Mexico, has agreed to fund a literacy program. The first expense is now $200,000, and an upgrade budget of $100,000 is still required every 7 years. Determine at an interest rate of 10 percent per year the permanent equivalent annual expense.
