Compute the unknown annual revenues to reach equilibrium on the cash flow series over the service life of the truck. (Assume annual interest rate of 8%).
Compute the unknown annual revenues to reach equilibrium on the cash flow series over the service life of the truck. (Assume annual interest rate of 8%).
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A company manager is considering purchasing a truck for transport and distribution of the company’s goods. The truck has an estimated service life of 18 years and its initial purchasing value is $ 60000. The annual earnings from the transport and the distribution of the goods are expected to change within the service life of the truck. That’s, at the end of the 1st, 7th and 14th years, each annual revenue will be $ 12000 and at the end of the other years, each annual revenue has again equal value but their values are different from $ 12000. Compute the unknown annual revenues to reach equilibrium on the cash flow series over the service life of the truck. (Assume annual interest rate of 8%).
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