Question

In: Accounting

A company had a steady revenue of $77,791. They expects revenue to decrease by $8,783 over...

A company had a steady revenue of $77,791. They expects revenue to decrease by $8,783 over the next 4 years. What is the total expected revenue worth right now if the company's MARR is 2%?

Solutions

Expert Solution

Total expected revenue worth right now if the company's MARR is 2% = 213.425

Explanation

Revenue in year 1 = $(77,791 - 8,783) = $69,008
Total expected revenue worth right now if the company's MARR is 2%
Year Revenue Present Value Discounted revenue
Factor at 2%
(A) (B) (A) x (B)
1 $              69,008.00                      0.9804 $            67,655.00
2 $              60,225.00                      0.9612 $            57,888.00
3 $              51,442.00                      0.9423 $            48,474.00
4 $              42,659.00                      0.9238 $            39,408.00
$          213,425.00

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