3. A project is expected to generate a cash flow of $2,000 in year 1, $800 in year 2, and $1,000 in year 3. At an interest rate of 10%, what is the maximum amount that you could invest in the project at year 0 and just break even? 2 Click the icon to view the interest factors for discrete compounding when i= 10% per year. The maximum amount that you could invest in the project at year 0 and just break even is $ (Round to the nearest dollar.)

Cornerstones of Cost Management (Cornerstones Series)
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Author:Don R. Hansen, Maryanne M. Mowen
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Chapter19: Capital Investment
Section: Chapter Questions
Problem 22E
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3. A project is expected to generate a cash flow of $2,000 in year 1, $800 in year 2, and $1,000 in year 3. At an interest rate of 10%, what is the maximum amount that you could
invest in the project at year 0 and just break even?
2 Click the icon to view the interest factors for discrete compounding when i= 10% per year.
The maximum amount that you could invest in the project at year 0 and just break even is $
(Round to the nearest dollar.)
2: More Info
Single Payment
Equal Payment Series
Compound
Present
Compound
Sinking
Present
Capital
Recovery
Amount
Worth
Amount
Fund
Worth
Factor
Factor
Factor
Factor
Factor
Factor
(F/P, i, N)
(P/F, i, N)
(F/A, i, N)
(A/F, i, N)
(P/A, i, N)
(A/P, i, N)
1
1.1000
0.9091
1.0000
1.0000
0.9091
1.1000
2
1.2100
0.8264
2.1000
0.4762
1.7355
0.5762
3
1.3310
0.7513
3.3100
0.3021
2.4869
0.4021
4
1.4641
0.6830
4.6410
0.2155
3.1699
0.3155
1.6105
0.6209
6.1051
0.1638
3.7908
0.2638
6
1.7716
0.5645
7.7156
0.1296
4.3553
0.2296
7
1.9487
0.5132
9.4872
0.1054
4.8684
0.2054
8
2.1436
0.4665
11.4359
0.0874
5.3349
0.1874
9
2.3579
0.4241
13.5795
0.0736
5.7590
0.1736
10
2.5937
0.3855
15.9374
0.0627
6.1446
0.1627
11
2.8531
0.3505
18.5312
0.0540
6.4951
0.1540
12
3.1384
0.3186
21.3843
0.0468
6.8137
0.1468
13
3.4523
0.2897
24.5227
0.0408
7.1034
0.1408
14
3.7975
0.2633
27.9750
0.0357
7.3667
0.1357
15
4.1772
0.2394
31.7725
0.0315
7.6061
0.1315
Transcribed Image Text:3. A project is expected to generate a cash flow of $2,000 in year 1, $800 in year 2, and $1,000 in year 3. At an interest rate of 10%, what is the maximum amount that you could invest in the project at year 0 and just break even? 2 Click the icon to view the interest factors for discrete compounding when i= 10% per year. The maximum amount that you could invest in the project at year 0 and just break even is $ (Round to the nearest dollar.) 2: More Info Single Payment Equal Payment Series Compound Present Compound Sinking Present Capital Recovery Amount Worth Amount Fund Worth Factor Factor Factor Factor Factor Factor (F/P, i, N) (P/F, i, N) (F/A, i, N) (A/F, i, N) (P/A, i, N) (A/P, i, N) 1 1.1000 0.9091 1.0000 1.0000 0.9091 1.1000 2 1.2100 0.8264 2.1000 0.4762 1.7355 0.5762 3 1.3310 0.7513 3.3100 0.3021 2.4869 0.4021 4 1.4641 0.6830 4.6410 0.2155 3.1699 0.3155 1.6105 0.6209 6.1051 0.1638 3.7908 0.2638 6 1.7716 0.5645 7.7156 0.1296 4.3553 0.2296 7 1.9487 0.5132 9.4872 0.1054 4.8684 0.2054 8 2.1436 0.4665 11.4359 0.0874 5.3349 0.1874 9 2.3579 0.4241 13.5795 0.0736 5.7590 0.1736 10 2.5937 0.3855 15.9374 0.0627 6.1446 0.1627 11 2.8531 0.3505 18.5312 0.0540 6.4951 0.1540 12 3.1384 0.3186 21.3843 0.0468 6.8137 0.1468 13 3.4523 0.2897 24.5227 0.0408 7.1034 0.1408 14 3.7975 0.2633 27.9750 0.0357 7.3667 0.1357 15 4.1772 0.2394 31.7725 0.0315 7.6061 0.1315
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