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An existing bottling plant requires investing $50,000 per year starting next year for 10 years. The plant is expected to generate a revenue of $30,000 per year starting next year and increasing by S5000 per year thereafter The plant will be sold for $2500 after 10 years. The correct Standard Notation and expected Rate of Return is:

An existing bottling plant requires investing $50,000 per year starting next year for 10 years. The plant is expected to generate a revenue of $30,000 per year starting next year and increasing by S5000 per year thereafter The plant will be sold for $2500 after 10 years. The correct Standard Notation and expected Rate of Return is:

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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An existing bottling plant requires investing $50,000 per year starting next year for 10 years. The plant is expected to generate a revenue of $30,000 per year starting next year and increasing by S5000 per year thereafter The plant will be sold for $2500 after 10 years. The correct Standard Notation and expected Rate of Return is:
Oc- 50,000 (PIA P. 10) + (30,000+5000) (P/G, i", 10) + 2,500 (P/F, ". 10) = 9.62% a -50.000 + 30,000 (PIA, , 10) + 5.000 (P/G, P, 10) + 2.500 (P/F, i", 10) = 0 and i'-8 03% Ob 50.000 (PIA, r, 10) + 30.000 (PlA, , 10) +5,000 (PIG, 1", 10) +2,500 (P/F, P. 10) and i'= 6.77% e. None of these Od -50,000 (P/IA, , 10) + 30,000 (PIA, , 9) +5,000 (PIG, i", 9) + 2,500 (P/F, i", 10) and it= 12.77%
Transcribed Image Text:Oc- 50,000 (PIA P. 10) + (30,000+5000) (P/G, i", 10) + 2,500 (P/F, ". 10) = 9.62% a -50.000 + 30,000 (PIA, , 10) + 5.000 (P/G, P, 10) + 2.500 (P/F, i", 10) = 0 and i'-8 03% Ob 50.000 (PIA, r, 10) + 30.000 (PlA, , 10) +5,000 (PIG, 1", 10) +2,500 (P/F, P. 10) and i'= 6.77% e. None of these Od -50,000 (P/IA, , 10) + 30,000 (PIA, , 9) +5,000 (PIG, i", 9) + 2,500 (P/F, i", 10) and it= 12.77%
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