A software company that installs systems for inventory control using RFID technology spent $600,000 per year for the past 3 years in developing their latest product. The company wants to recover its investment in 5 years beginning now. If the company signed a contract that will pay $250,000 now and amounts increasing by a uniform amount each year through year 5, how much must the increase be each year? Use an interest rate of 15% per year.

A software company that installs systems for inventory control using RFID technology spent $600,000 per year for the past 3 years in developing their latest product. The company wants to recover its investment in 5 years beginning now. If the company signed a contract that will pay $250,000 now and amounts increasing by a uniform amount each year through year 5, how much must the increase be each year? Use an interest rate of 15% per year.

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter13: Other Financing Alternatives

Section: Chapter Questions

Problem 1bM

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