1.) UniCaltex owns several gas wells in Metro Manila. Revenue from the wells has been increasing according to the arithmetic gradient for the past 6 years. The revenue in year 1 from a certain well was $420,000 and it increased by $12,000 each year thereafter. Determine the equivalent Annual Worth of the revenue through year 5. Assume an interest rate of 8% per year.
1.) UniCaltex owns several gas wells in Metro Manila. Revenue from the wells has been increasing according to the arithmetic gradient for the past 6 years. The revenue in year 1 from a certain well was $420,000 and it increased by $12,000 each year thereafter. Determine the equivalent Annual Worth of the revenue through year 5. Assume an interest rate of 8% per year.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:1.) UniCaltex owns several gas wells in Metro Manila. Revenue from the wells has
been increasing according to the arithmetic gradient for the past 6 years. The revenue
in year 1 from a certain well was $420,000 and it increased by $12,000 each year
thereafter. Determine the equivalent Annual Worth of the revenue through year 5.
Assume an interest rate of 8% per year.
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