Consider the following investment project. Calculate the net future worth of thi

Question

Consider the following investment project. Calculate the net future worth of this investment at 12% and determine the acceptability of the investment. - $83,000 33,700 34,700 33,900 33,900 23,000 Click the icon to view the interest factors for discrete compounding when i-12% per year. More Info The net future worth of this investment will be S thousand. (Round to one decimal place.) Single Payment Equal Payment Series Compound Present Worth Factor Compound Sinking PresentCapital Fund Factor Recovery Factor Amount Amount Factor Worth Factor Factor (F/P I, N) (P/F I, N) 1.1200 1.2544 1.4049 1.5735 1.7623 0.8929 0.7972 0.7118 0.6355 0.5674 1.0000 2.1200 3.3744 4.7793 6.3528 1.0000 0.4717 0.2963 0.2092 0.1574 0.8929 1.6901 2.4018 3.0373 3.6048 1.1200 0.5917 0.4163 0.3292 0.2774 1.9738 2.2107 2.4760 2.7731 3.1058 0.5066 0.4523 0.4039 0.3606 0.3220 8.1152 10.0890 12.2997 14.7757 17.5487 0.1232 0.0991 0.0813 0.0677 0.0570 4.1114 4.5638 4.9676 5.3282 5.6502 0.2432 0.2191 0.2013 0.1877 0.1770 10 Enter your answer in the answer box and then click Check Answer

Explanation / Answer

ANSWER:

We will first find the pw and then the future worth.

i = 12%

pw = cash flow in year 0 + cash flow in year 1(p/f,i,n ) +  cash flow in year 2(p/f,i,n ) +  cash flow in year 3(p/f,i,n ) +  cash flow in year 4(p/f,i,n ) +  cash flow in year 5(p/f,i,n )

pw = -83,000 + 33,700(p/f,12%,1) + 34,700(p/f,12%,2) + 33,900(p/f,12%,3) + 33,900(p/f,12%,4) + 23,000(p/f,12%,5)

pw = -83,000 + 33,700 * 0.8929 + 34,700 * 0.7972 + 33,900 * 0.7118 + 33,900 * 0.6355 + 23,000 * 0.5674

pw = -83,000 + 30,090.73 + 27,662.84 + 24,130.02 + 21,543.45 + 13,050.2

pw = $33,477.24

fw = pw(f/p,i,n)

i =125 and n = 5 years

fw = 33,477.24(f/p,12%,5)

fw = 33,477.24 * 1.762

fw = $58,986.9

so the future worth is approx $58,987

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.