The future worth of a project with initial cost P, positive annual cash flows of A, salvage value S, and interest rate of i over a life of n years can be calculated using which statement? (a) FW = −P(F/P, i%, n) + A(F/A, i%, n) + S(F/P, i%, n) (b) FW = P(F/P, i%, n) + A(F/A, i%, n) + S (c) FW = −P(P/F, i%, n) + A(F/A, i%, n) − A[(P/A, i%, n) + S (d) FW = −P(F/P, i%, n) + A(F/A, i%, n) + S?
The future worth of a project with initial cost P, positive annual cash flows of A, salvage value S, and interest rate of i over a life of n years can be calculated using which statement? (a) FW = −P(F/P, i%, n) + A(F/A, i%, n) + S(F/P, i%, n) (b) FW = P(F/P, i%, n) + A(F/A, i%, n) + S (c) FW = −P(P/F, i%, n) + A(F/A, i%, n) − A[(P/A, i%, n) + S (d) FW = −P(F/P, i%, n) + A(F/A, i%, n) + S?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The future worth of a project with initial cost P, positive annual cash flows of A, salvage value S, and interest rate of i over a life of n years can be calculated using which statement?
(a) FW = −P(F/P, i%, n) + A(F/A, i%, n) + S(F/P, i%, n)
(b) FW = P(F/P, i%, n) + A(F/A, i%, n) + S
(c) FW = −P(P/F, i%, n) + A(F/A, i%, n) − A[(P/A, i%, n) + S
(d) FW = −P(F/P, i%, n) + A(F/A, i%, n) + S?
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