In: Economics
Draw the cash flow diagram for the following data.
A company purchases a machine to make widgets for $10,000. the
collect payment for their widgets at the end of the year in which
they are delivered. At the end of 5 years the machine must be
scrapped at which time its value is $0. The following is the net
revenue generated by the widget machine.
Year 1 - $2,500
Year 2 - $3,500
Year 3 - $2,250
Year 4 - $3,000
Year 5 - $2,000
What is the present worth of the widget machine if the companies
TVOM is 5.37%? $
What is the future worth at the end of the 5 year life cycle? $