The Iligan Light & Power Inc. estimates that the present worth now of increased revenue from an investment in renewable energy sources is P12,475,000. There will be no new revenue in years 1 or 2, but in year 3 revenue will be P250,000, and thereafter it will increase according to an arithmetic gradient through year 15. What is the required gradient, if the expected rate of return is 15% per year?
The Iligan Light & Power Inc. estimates that the present worth now of increased revenue from an investment in renewable energy sources is P12,475,000. There will be no new revenue in years 1 or 2, but in year 3 revenue will be P250,000, and thereafter it will increase according to an arithmetic gradient through year 15. What is the required gradient, if the expected rate of return is 15% per year?
Chapter1: Making Economics Decisions
Section: Chapter Questions
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The Iligan Light & Power Inc. estimates that the present worth now of increased revenue from an investment in renewable energy sources is P12,475,000. There will be no new revenue in years 1 or 2, but in year 3 revenue will be P250,000, and thereafter it will increase according to an arithmetic gradient through year 15. What is the required gradient, if the expected
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