Answered: Year 0 1 2 -90,000 32,000 32,000 a. If…

Year 0 1 2 -90,000 32,000 32,000 a. If the cash flow pattern for each project repeats itself every 7 years A 3 16,000 4 5 6 16,000 16,000 16,000 7 32,000

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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Question

Consider the following project (MARR = 12%):
Year 0
1
2
A -90,000 32,000 32,000
3
16,000
4
16,000
5
6
16,000 16,000
a. If the cash flow pattern for each project repeats itself every 7 years
thereafter, how much is the capitalized worth of each project?
7
32,000

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