A project consists of a cost (negative cash flow) of $1,000 in Year 0 and a benefit (positive cash flow) of $125,000 in Year 6. The relevant MARR is 100% (one hundred percent) per year. Find the annuity from Year 2 to Year 6 that is equivalent to this project. That is, find the value of A such that receiving $A per year for five years, from Year 2 to Year 6, is equivalent to paying $1,000 in Year 0 and receiving $125,000 in Year 6. Use (A/P,i,N) and (A/F,i,N) in your answer. You may also use other discount factors if you need to. To help you visualize this question, the relevant cash flow diagrams are shown below. You are solving for A: $125,000

A project consists of a cost (negative cash flow) of $1,000 in Year 0 and a benefit (positive cash flow) of $125,000 in Year 6. The relevant MARR is 100% (one hundred percent) per year. Find the annuity from Year 2 to Year 6 that is equivalent to this project. That is, find the value of A such that receiving $A per year for five years, from Year 2 to Year 6, is equivalent to paying $1,000 in Year 0 and receiving $125,000 in Year 6. Use (A/P,i,N) and (A/F,i,N) in your answer. You may also use other discount factors if you need to. To help you visualize this question, the relevant cash flow diagrams are shown below. You are solving for A: $125,000

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Description: A project consists of a cost (negative cash flow) of $1,000 in Year 0 and a benefit(positive cash flow) of $125,000 in Year 6. The relevant MARR is 100% (one hundredpercent) per year. Find the annuity from Year 2 to Year 6 that is equivalent to this

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 4BE: Internal rate of return A project is estimated to cost 463,565 and provide annual net cash flows of...

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