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A company plans to finance a large project that will last 8 years. The company will borrow $300,000 now to finance the project. How much will the company have to received in annual payments for 8 years, provided it will also receive a final lump sum payment after 8 years in the amount of $70,000.
The MARR is 10% per year on this investment.
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Question & Answer: A company plans to finance a large project that will last 8 years. The company will borrow $300,000 now to finance the project. How muc…..
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Round to the nearest whole number.
For units use one of the following: $, $/year, $/month, or %.
Your Answer:
Expert Answer
Present value of $ 70000 = 70000 * PVIF ( 10 % , 8 )
70000 * 0.4665 = $ 32655
The company will have to receive ( 300000 – 32655 ) / PVIFA ( 10 % , 8 )
267345 / 5.3349 = $ 50112
The answer is $ 50112.
