Required information A theft-avoidance locking system has a first cost of $19.000, an AOC of $16.000, and no salvage value after its 3 year life. Assume that you were told the service provided by this asset would be needed for only 5 years. This means that the asset will have to be repurchased and kept for only 2 years. What would its market value, call it M have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle at an interest rate of 10% per year? Determine the market value Musing a spreadsheet with PMT functions and GOAL SEEK (Please upload your response/solution using the controls below)
Required information A theft-avoidance locking system has a first cost of $19.000, an AOC of $16.000, and no salvage value after its 3 year life. Assume that you were told the service provided by this asset would be needed for only 5 years. This means that the asset will have to be repurchased and kept for only 2 years. What would its market value, call it M have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle at an interest rate of 10% per year? Determine the market value Musing a spreadsheet with PMT functions and GOAL SEEK (Please upload your response/solution using the controls below)
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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Transcribed Image Text:Required information
A theft-avoidance locking system has a first cost of $19.000, an AOC of $16,000, and no salvage value after its 3-year life.
Assume that you were told the service provided by this asset would be needed for only 5 years. This means that the asset
will have to be repurchased and kept for only 2 years.
What would its market value, call it M. have to be after 2 years in order to make its annual worth the same as it is for its 3-year life cycle at an interest rate of 10% per
year? Determine the market value Musing a spreadsheet with PMT functions and GOAL SEEK
(Please upload your response/solution using the controls below.)
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