A small business purchased now for P70,000 will lose P8,600 each year for first 5 years. An additional investment of P35,000 in the business will required at the end of the five year.

Entrepreneurial Finance
6th Edition
ISBN:9781337635653
Author:Leach
Publisher:Leach
Chapter13: Other Financing Alternatives
Section: Chapter Questions
Problem 1bM
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A small business purchased now for P70,000 will lose P8,600 each year for first 5 years. An additional investment of P35,000 in the business will required at the end of the five year. After 15 years the business can be sold for P90, 000. What should be the profit each year from the fifth through the fifteenth year to obtain a rate return of 25%?

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