The initial construction cost of a project is $200000 which should be paid at the beginning of the construction period (time =0). Extra expenditures planning to be paid during operation period, which are ($5000) at the end of the first year, $3000 at the end of the second year, $1000 at the end of the third year, $1000 at the end of the fifth year and $ 1000 at the end of the sixth year. If the project life is 10 years and the interest rate is %10, draw the cash flow diagram and find a) the present worth of the project, b) the future worth at the end of the project life, c) the annual payment worth
The initial construction cost of a project is $200000 which should be paid at the beginning of the construction period (time =0). Extra expenditures planning to be paid during operation period, which are ($5000) at the end of the first year, $3000 at the end of the second year, $1000 at the end of the third year, $1000 at the end of the fifth year and $ 1000 at the end of the sixth year. If the project life is 10 years and the interest rate is %10, draw the cash flow diagram and find a) the present worth of the project, b) the future worth at the end of the project life, c) the annual payment worth
Chapter11: Capital Budgeting And Risk
Section: Chapter Questions
Problem 15P
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The initial construction
cost of a project is $200000 which should be paid at the beginning of the
construction period (time =0). Extra expenditures planning to be paid during
operation period, which are ($5000) at the end of the first year, $3000 at the
end of the second year, $1000 at the end of the third year, $1000 at the end of
the fifth year and $ 1000 at the end of the sixth year. If the project life is
10 years and the interest rate is %10, draw the cash flow diagram and find a)
the present worth of the project, b) the future worth at the end of the project
life, c) the annual payment worth
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