You invested $100,000 in a project and received $40,000 at n = 1, $40,000 at n = 2, and $30,000 at n = 3 years. You need to terminate the project at the end of year 3. Your interest rate is 10%; what is the project balance at the time of termination? (a) Gain of $10,000 (b) Loss of $8,039 (c) Loss of $10,700 (d) Just break even

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
Problem 1P
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You invested $100,000 in a project and received $40,000 at n = 1, $40,000 at
n = 2, and $30,000 at n = 3 years. You need to terminate the project at the end of year 3. Your interest rate is 10%; what is the project balance at the time of termination?
(a) Gain of $10,000
(b) Loss of $8,039
(c) Loss of $10,700
(d) Just break even

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