Instructions: Provide solutions for the following questions.
Assume that interest rate is 20%.
State any other relevant assumptions made.
Find the future Worth (at end of project) of an investment that requires 200,000 Naira startup cost and demands 50,000 Naira maintenance costs per year. The revenue per year is estimated at 100,000 Naira in the first 3 years, and 150,000 Naira in the last two years.
What is the present worth of a 10-year prize of 35,000 Naira per year?
Consider an enterprise that sets up a photocopying service. The photocopier will cost 250,000 Naira to purchase and 50,000 Naira to install. Maintenance costs are put at 35,000 per year. Revenue streams are estimated at 100,000 Naira each in first 3 years and 80,000 Naira each in the last two years. It is expected to be sold for 20% of its first cost after 5 years. Find the following:
The present Worth.