How much must be set aside at the end of each year by Speedway to replace a cash register every three years that cost $5,000 if

Question

3 years ago

5

the money will be invested into a sinking fund that carns 10% annual interest compounded annually?

1 answer:

Lostsunrise [7] · Answer 1 · 2023-01-13T08:04:41+03:00

7 0

Answer:

The PV of the cash inflows is $15,000/1.15 + $10,000/1.152 + $5,000/1.153 = $23,892.50.

Therefore, the NPV is -$25,000 + $23,892.50 = -$1,107.50.

Since the NPV of the project is negative, you would reject the project.

Step-by-step explanation: