e at the The net revenue at the end of year 2 is $4,000. The net revenue at the end of year 3 is $6,000. The net revenue at the end of year 4 is $10,000. This includes revenue from operations and sale of the used equipment. The interest rate is 5%. What is the levelized net revenue with four equal payments at the end of years 1 to 4 if the annuity factor is given by 1- (1+i) (1.05)4 .05 = 3.54

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter11: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 4CDQ: How would each of the following costs be classified if units produced is the activity base? a....
icon
Related questions
Question
Consider a piece of equipment for which the expenditure at the beginning of period 1 is $15,000. Given that this is a cost, consider it as a negative in a net revenue framework.
The net revenue at the end of year 1 is $2,000.
The net revenue at the end of year 2 is $4,000.
The net revenue at the end of year 3 is $6,000.
The net revenue at the end of year 4 is $10,000. This includes revenue from operations and sale of the used equipment.
The interest rate is 5%.
What is the levelized net revenue with four equal payments at the end of years 1 to 4 if the annuity factor is given by
(1+i)"
1
(1.05)4
.05
= 3.546.
Transcribed Image Text:Consider a piece of equipment for which the expenditure at the beginning of period 1 is $15,000. Given that this is a cost, consider it as a negative in a net revenue framework. The net revenue at the end of year 1 is $2,000. The net revenue at the end of year 2 is $4,000. The net revenue at the end of year 3 is $6,000. The net revenue at the end of year 4 is $10,000. This includes revenue from operations and sale of the used equipment. The interest rate is 5%. What is the levelized net revenue with four equal payments at the end of years 1 to 4 if the annuity factor is given by (1+i)" 1 (1.05)4 .05 = 3.546.
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Mortgage Amortization
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning