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NeX [460]
3 years ago
11

Trident Office is considering remodeling the office building it leases to Robert Roberts, CPA. The remodeling costs are estimate

d at $225,000. If the building is remodeled, Robert Roberts, CPA has agreed to pay an additional $75,000 per year in rent for the next five years. The discount rate is 10 percent. What is the benefit of the remodeling project to Professional Properties
Business
1 answer:
mezya [45]3 years ago
4 0

Answer:

$59,309

Explanation:

Years  Cash flow   PV Factor at 10%   Present value of cash flows

0         225,000                1.00000                    225,000

1          75,000                   0.90909                    68,182

2          75,000                  0.82645                    61,983

3          75,000                  0.75131                       56,349

4          75,000                  0.68301                      51,226

5          75,000                  0.62092                     <u>46,569</u>

Benefit of remodeling project                          <u>$59,309</u>

Note: Year 0 PV factor = 1/(1+10%)^0 = 1

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A matrix organization for project management has a distinct advantage because:A) Dual hierarchies mean two bosses.B) A significa
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