Calculate the future worth of the purchase shown below using an interest rate of 5% per...

Calculate the future worth of the purchase shown below using an interest rate of 5% per year. First Cost: -$21,000 Operating Cost: -$3,000/YR Salvage Value: $3,000 Useful Life: 3 Years

Expert Solution

Future worth is $30768. Pls see calculations below.

T	Investment	Operating Cost	Salvage Value	Total CF (sum of all three)	Future Worth = Total CF x (1.05)^(3-t), where 1.05 = 1+rate of interest, and t = time
0	-21,000			-21,000	-24,310
1		-3,000		-3,000	-3,308
2		-3,000		-3,000	-3,150
3		-3,000	3,000	-	-
Total	-21,000	-9,000	3,000	-27,000	-30,768

Rahul Sunny answered 1 year ago

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