new project paying yment renuu payments of 250,000$ starting from the end of 1st year. On the beginning of 4th year, he started to gain revenue of 800,000$, his revenue decreased for the next 4 years with arithmetic gradient of 5000$ per year. Then the next 2 years his revenue was zero respectively, so he decided to make some new changes and he gained a revenue of 400, 000S at the end of 10th year. Make Cash Flow Diagram After that Calculate the cost of his project and the revenue if the rate of interest for cost was 5% and for the revenue 8%.
new project paying yment renuu payments of 250,000$ starting from the end of 1st year. On the beginning of 4th year, he started to gain revenue of 800,000$, his revenue decreased for the next 4 years with arithmetic gradient of 5000$ per year. Then the next 2 years his revenue was zero respectively, so he decided to make some new changes and he gained a revenue of 400, 000S at the end of 10th year. Make Cash Flow Diagram After that Calculate the cost of his project and the revenue if the rate of interest for cost was 5% and for the revenue 8%.
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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Question
![HW// A man started a new project paying initial payment of 500,000S, then 4 annual
payments of 250,000$ starting from the end of 1st year. On the beginning of 4h year,
he started to gain revenue of 800,000$, his revenue decreased for the next 4 years
with arithmetic gradient of 5000$ per year. Then the next 2 years his revenue was
zero respectively, so he decided to make some new changes and he gained a revenue
of 400, 000S at the end of 10th year. Make Cash Flow Diagram After that Calculate
the cost of his project and the revenue if the rate of interest for cost was 5% and for
the revenue 8%.
Useful Equation:
Po= PA +PG
+ if the series of payment increasing by a constant amount G
Po= PA – PG
+ if the series of payment decreasing by a constant amount G
PA = A[+)"-1]
(1+1)"+t
A-G[;
A=GE-a0-
[(1+i)"–1
(1+)"-1.
P = A
(1+i)"-i.
F = P (1+ i)"
P = F (1+ i)-"
F = A |
[(1+i)".](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fadaf03ba-4b58-4dbd-916d-3ce4df30ca58%2Fe7e3b293-df97-4743-b969-fe2b5b32b91a%2Fchu09s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:HW// A man started a new project paying initial payment of 500,000S, then 4 annual
payments of 250,000$ starting from the end of 1st year. On the beginning of 4h year,
he started to gain revenue of 800,000$, his revenue decreased for the next 4 years
with arithmetic gradient of 5000$ per year. Then the next 2 years his revenue was
zero respectively, so he decided to make some new changes and he gained a revenue
of 400, 000S at the end of 10th year. Make Cash Flow Diagram After that Calculate
the cost of his project and the revenue if the rate of interest for cost was 5% and for
the revenue 8%.
Useful Equation:
Po= PA +PG
+ if the series of payment increasing by a constant amount G
Po= PA – PG
+ if the series of payment decreasing by a constant amount G
PA = A[+)"-1]
(1+1)"+t
A-G[;
A=GE-a0-
[(1+i)"–1
(1+)"-1.
P = A
(1+i)"-i.
F = P (1+ i)"
P = F (1+ i)-"
F = A |
[(1+i)".
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