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timofeeve [1]
3 years ago
15

American Gas Products manufactures a device called a Can-Emitor that empties the contents of old aerosol cans in 2 to 3 seconds.

This eliminates having to dispose of the cans as hazardous wastes. If a certain paint company can save $75,000 per year in waste disposal costs, how much could the company afford to spend now on the Can-Emitor if it wants to recover its investment in 3 years at an interest rate of 20% per year?
Business
1 answer:
kakasveta [241]3 years ago
5 0

Answer:

$157,986.11

Explanation:

Given that

Amount = $75,000

Number of years = 3

Interest rate = 20%

The computation of the present value is shown below:-

Here we will use the P/A factor which is here

Present value = Amount × (1 + Interest rate)^number of years - 1 ÷ (Interest rate × (1 + Interest rate)^Number of years

= $75,000 × ((1 + 20%)^3 - 1) ÷ (0.20 × (1 + 0.20)^3)

= $75,000 × (0.728  ÷ 0.3456)

= $75,000 × 2.106481481

= $157,986.1111

or

= $157,986.11

Therefore for computing the present value we simply applied the above formula.

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Answer:

b. slow industry growth.

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3 0
3 years ago
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False

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4 years ago
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