With an increase in product advertising of $50 million you expect to increase sales by 10,000 units. If unit grow margin is $4,8
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Answer:
Explanation:
Annual worth: this will be the annuity payment equivalent to all the cashflow of the investment. Thus the PMT of the net present value
Cash Investment at F0: <em>230,000/2 = 115,000</em>
present value of 7,500 salvage value:
Maturity 7,500.00
time 7 years
MARR: 10% = 0.1
PV <em> 3,848.69 </em>
<u>Then, we need to calculate the present value of the loan discounted at 10%</u>
half the investment is finance: 230,000 / 2 = <em>115,000</em>
Then, this capitalize 2 year at 8% before the first payment:
Principal 115,000.00
time 2 year
MARR: 10% = 0.08000
Amount 134,136.00
Now we need to discount this loan at 10% which is our rate of return:
Maturity 134,136.00
time 2.00
MARR: 10% = 0.1
PV <em>110,856.20 </em>
Finally: we add this values to get the resent worth:
<em>115,000 + 110,856.20 - 3,848.69 = </em><em>222,007.51</em>
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Last step, we calculate the PMT of the present worth:
PV 222,007.51
time 7 years
MARR: 10% = 0.1
C $ 45,601.564
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