Suppose you wish to purchase a factory that will yield an annual return of $12,000 for 12 years, after which the factory will have no value. You want to earn 8.25% annually on your investment and also set up a sinking fund to replace the purchase price. If money is placed in the fund at the end of each year and earns 4.2% compounded annually, how much should you pay for the factory? $81,921 b) $81,487 C) $80,487 d) $80,921 e) $82,487

Suppose you wish to purchase a factory that will yield an annual return of $12,000 for 12 years, after which the factory will have no value. You want to earn 8.25% annually on your investment and also set up a sinking fund to replace the purchase price. If money is placed in the fund at the end of each year and earns 4.2% compounded annually, how much should you pay for the factory? $81,921 b) $81,487 C) $80,487 d) $80,921 e) $82,487

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5EB: A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment...

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