Tanya is considering an investment that will require an initial payment of 400,000 and additional payments of 100,000 and 50,000 at the end of years one and two, respectively. It is expected that revenue from this investment will be 150,000 per year for five years, beginning one year from the initial investment. Assuming an annual effective rate of 10%, calculate the net present value of this investment.
Tanya is considering an investment that will require an initial payment of 400,000 and additional payments of 100,000 and 50,000 at the end of years one and two, respectively. It is expected that revenue from this investment will be 150,000 per year for five years, beginning one year from the initial investment. Assuming an annual effective rate of 10%, calculate the net present value of this investment.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...
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Tanya is considering an investment that will require an initial payment of 400,000 and additional
payments of 100,000 and 50,000 at the end of years one and two, respectively. It is expected that
revenue from this investment will be 150,000 per year for five years, beginning one year from the
initial investment.
Assuming an annual effective rate of 10%, calculate the
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