tment on your part. He promises you revenue (before expenses) of $1,800 per year, and increasing by $100 per year thereafter. Your share of the estimated annual expenses is $500. You are planning to invest for 6 years. Your uncle has promised to buy out your share of the business at that time for $12.000. You have decided to set a personal MARR of 15% per year. Use the PW, FW and AW method to determine the profitability of this investment project.
tment on your part. He promises you revenue (before expenses) of $1,800 per year, and increasing by $100 per year thereafter. Your share of the estimated annual expenses is $500. You are planning to invest for 6 years. Your uncle has promised to buy out your share of the business at that time for $12.000. You have decided to set a personal MARR of 15% per year. Use the PW, FW and AW method to determine the profitability of this investment project.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Your uncle has almost convinced you to invest in his peach farm. It would require a $10,000 initial investment on your part. He promises you revenue (before expenses) of $1,800 per year, and increasing by $100 per year thereafter. Your share of the estimated annual expenses is $500. You are planning to invest for 6 years. Your uncle has promised to buy out your share of the business at that time for $12.000. You have decided to set a personal MARR of 15% per year. Use the PW, FW and AW method to determine the profitability of this investment project.
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