Question

A factory costs $430,000. You forecast that it will produce cash inflows of $135,000 in year 1, $195,000 in year

2, and $330,000 in year 3. The discount rate is 12%.

a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. Is the factory a good investment?

 

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Question

Your wealthy uncle established a bank account with $2,100 for you when you were

born. For the first 9 years of your life, the interest rate earned on the account was 4%. Since then, rates have been only 2%. Now you are 23 years old and ready to cash in. How much is in your account? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 

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