1.For the following cash flow compute:Investment$65,00042,00060,000Annual operating CostAnnual RevenuesOperating cost will increase by ArithmeticGradient of G=$500 annually from the secondyear thru the 6 yearSalvage Value at the end of 6 yearInvestment life n=6 years MARR= 10%3,000Hint for IRR use 20%a.Draw the cash-flow Diagram and compute PVW AW.FWb.IRRC.ERR

We have the following information Investment 65,000 Annual operating cost 40,000 increasing by $800…

Answered: Annual operating Cost Annual Revenues…

Annual operating Cost Annual Revenues Operating cost will increase Gradient of G=$500 annually year thru the 6" year Salvage Value at the end of 6y T stment life n=6 vears MARE rears MARE

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1.
For the following cash flow compute:
Investment
$65,000
42,000
60,000
Annual operating Cost
Annual Revenues
Operating cost will increase by Arithmetic
Gradient of G=$500 annually from the second
year thru the 6 year
Salvage Value at the end of 6 year
Investment life n=6 years MARR= 10%
3,000
Hint for IRR use 20%
a.
Draw the cash-flow Diagram and compute PVW AW.FW
b.
IRR
C.
ERR

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