770 000 $ investment was made 7 years ago for a construction equipment. Annual revenue from the use of this machine is $140 000. A maintenance-repair expense of $3,000 was made for the first year, and $500 for each subsequent year, in addition to the previous year. The company plans to sell the construction equipment at the end of the year (9th year) after 2 years with a scrap value of 135,000 USD. Calculate the cash flow from 3 years ago. A) 134 500 B) 135 500 C) 140 000 D) 133 500 E) 135 000
770 000 $ investment was made 7 years ago for a construction equipment. Annual revenue from the use of this machine is $140 000. A maintenance-repair expense of $3,000 was made for the first year, and $500 for each subsequent year, in addition to the previous year. The company plans to sell the construction equipment at the end of the year (9th year) after 2 years with a scrap value of 135,000 USD. Calculate the cash flow from 3 years ago. A) 134 500 B) 135 500 C) 140 000 D) 133 500 E) 135 000
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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770 000 $ investment was made 7 years ago for a construction equipment. Annual revenue from the use of this machine is $140 000. A maintenance-repair expense of $3,000 was made for the first year, and $500 for each subsequent year, in addition to the previous year. The company plans to sell the construction equipment at the end of the year (9th year) after 2 years with a scrap value of 135,000 USD. Calculate the cash flow from 3 years ago.
A) 134 500
B) 135 500
C) 140 000
D) 133 500
E) 135 000
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