The nihilist Ivan is setting up a recording studio which will have an annual revenue of $70,000 and annual cost of $40,000. The studio will require an initial investment of $10,000. What is the net present value after two years of recording? Ivan's discount rate is 10%, and income tax in Riga, where he lives, is 40%. In the investment year, depreciation on all items is 20%, then 50% the following year, and 30% in the next year, which is the end of the schedule. A. $57,700 B. $24,800 C. $34,400 D. $42.100

The nihilist Ivan is setting up a recording studio which will have an annual revenue of $70,000 and annual cost of $40,000. The studio will require an initial investment of $10,000. What is the net present value after two years of recording? Ivan's discount rate is 10%, and income tax in Riga, where he lives, is 40%. In the investment year, depreciation on all items is 20%, then 50% the following year, and 30% in the next year, which is the end of the schedule. A. $57,700 B. $24,800 C. $34,400 D. $42.100

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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