eedback o buy them. XCompany will sell machines to Course Contents. .SECOND CHAN

Question

eedback o buy them. XCompany will sell machines to Course Contents. .SECOND CHANCE EXAM 2 . Questien 11 vending machines but Reconsider the prises to buy them back in eve year. Assume that Middletown, anna' pront equation for the snack Operetion so.11(x)·S74.900.·lere x sell 790,000 snack items in each of the next five years. X Company is willing to negotiate the purchase price with Middletown, b Assuming Middenown-ares g% return on this me trere, what is the most they can pay for the ve ding machres? the rumber-s ack-en but R promises to purchase the machines back in five years for $4,000 sold. Middletown Send Feedback

Explanation / Answer

Profit Equation 0.11 X -74900 Number of Units sold(X) 790000 Annual profits 12000 Annuity factor for 5 years at 8% 3.9927 Present value of Annual profits 47912.4 Add: present value of buy back price 2724 ( $4000 * PVF at 0.681) Present value of cash inflows 50636 Therefore, the price which is atmost paid by Hhospital is $50636

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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