The mine that will last for 20 years gives an income of P 60,000 per year. If the investor desires 8% yield on his investment and will accumulate a capital replacement fund at 5%.. Find the value that the investor must pay for the mine. Show your solution.

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
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The mine that will last for 20 years gives an income of P 60,000 per year. If the investor desires 8% yield on his investment and will accumulate a capital replacement fund at 5%.. Find the value that the investor must pay for the mine. Show your solution.
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