Consider a piece of equipment for which the expenditure at the beginning of period 1 is $40,000. Given that this is a cost, consider it as a negative in a net revenue framework. The net revenue at the end of year 1 is $15,000. The net revenue at the end of year 2 is $20,000. The net revenue at the end of year 3 is $21,000. The net revenue at the end of year 4 is $25,000. This includes revenue from operations and sale of the used equipment. The interest rate is 6%. What is the net present value of this net revenue stream?
Consider a piece of equipment for which the expenditure at the beginning of period 1 is $40,000. Given that this is a cost, consider it as a negative in a net revenue framework. The net revenue at the end of year 1 is $15,000. The net revenue at the end of year 2 is $20,000. The net revenue at the end of year 3 is $21,000. The net revenue at the end of year 4 is $25,000. This includes revenue from operations and sale of the used equipment. The interest rate is 6%. What is the net present value of this net revenue stream?
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Consider a piece of equipment for which the expenditure at the beginning of period 1 is $40,000. Given that this is a cost, consider it as a negative in a net revenue framework. The net revenue at the end of year 1 is $15,000. The net revenue at the end of year 2 is $20,000. The net revenue at the end of year 3 is $21,000. The net revenue at the end of year 4 is $25,000. This includes revenue from operations and sale of the used equipment. The interest rate is 6%. What is the
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