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
Related questions
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)".
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education