The annual income from the mine is P100,000 and the life of the mine is 25 years. Find the price that an investor is willing to pay for if he considers that money is worth 5% and if he is to accumulate a sinking fund at 7% in order to replace the capital he invested?

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
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The annual income from the mine is
P100,000 and the life of the mine is 25 years.
Find the price that an investor is willing to pay
for if he considers that money is worth 5%
and if he is to accumulate a sinking fund at
7% in order to replace the capital he
invested?
Transcribed Image Text:The annual income from the mine is P100,000 and the life of the mine is 25 years. Find the price that an investor is willing to pay for if he considers that money is worth 5% and if he is to accumulate a sinking fund at 7% in order to replace the capital he invested?
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