verizon communications said it plans to spend $22.9 billion to expand its fiber

Question

verizon communications said it plans to spend $22.9 billion to expand its fiber optic internet and television network so that it can compete with cable tv providers like comcast corp. if the company attracts 950,000 customers in one year and grows its customer base by a constant amount of 15% per year, what is the future worth of the total subscription income in year 5? estimates indicate that income will avarage $800 per customer per year, assume verizon uses a MARR of 10% per year

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Explanation / Answer

Details First year customers                  950,000 Constant growth per year 15% 2nd year customers (950,000 *1.15)               1,092,500 3rd year coustmers (1092500 *1.15)               1,256,375 4th year coustmers (1256375 *1.15)               1,444,831 5th year coustmers (1444831*1.15) (a)               1,661,556 Average Income per customer (b) $                      800 total average income for 5th year (c ) = (a)*(b) $ 1,329,244,800 MARR (22.9 million * 10%) $          2,290,000

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