An investor pays $245,000 for a mine that will produce level annual revenue for 18 years. What should the level annual revenue be (received at the end of each year) if the investor is to receive 6% annual return on the investment while recovering the principal in a sinking fund earning 4.5% per year?
An investor pays $245,000 for a mine that will produce level annual revenue for 18 years. What should the level annual revenue be (received at the end of each year) if the investor is to receive 6% annual return on the investment while recovering the principal in a sinking fund earning 4.5% per year?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 16P
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![6: An investor pays $245,000 for a mine that will produce level annual revenue for 18 years. What should the level
annual revenue be (received at the end of each year) if the investor is to receive 6% annual return on the
investment while recovering the principal in a sinking fund earning 4.5% per year?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1652026a-6ba6-42d7-9e35-ad3e7516e1ec%2F6f5f8d5f-217b-44f0-81a2-45f3c517b6c5%2Fn1gyxit_processed.png&w=3840&q=75)
Transcribed Image Text:6: An investor pays $245,000 for a mine that will produce level annual revenue for 18 years. What should the level
annual revenue be (received at the end of each year) if the investor is to receive 6% annual return on the
investment while recovering the principal in a sinking fund earning 4.5% per year?
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