A company invested $70,000 in a business with the following cash flow results: End of Year CF -$ 70,000 20,000 19,000 1 2 3 18,000 17,000 16,000 15,000 14,000 7 8. 13,000 12,000 11,000 10,000 9,000 10 11 12 13 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 14 15 16 17 18 19 20 Assuming MARR to be 10%, determine the following: a. Present worth b. Annual Worth c. Future Worth

Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter6: Cash And Internal Control
Section: Chapter Questions
Problem 6.2E
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A company invested $70,000 in a business with the following cash flow results:
End of Year
CF
-$ 70,000
20,000
1
2
19,000
18,000
17,000
16.000
4
6
15,000
14,000
13,000
12,000
7
8
10
11,000
10,000
9,000
11
12
13
14
8,000
7,000
6,000
15
16
5,000
4,000
17
18
3,000
19
2,000
20
1,000
Assuming MARR to be 10%, determine the following:
a. Present worth
b. Annual Worth
c. Future Worth
d. Internal rate of return
e. External rate of retun
f. Saving/investment ration
g. Payback Period
Transcribed Image Text:A company invested $70,000 in a business with the following cash flow results: End of Year CF -$ 70,000 20,000 1 2 19,000 18,000 17,000 16.000 4 6 15,000 14,000 13,000 12,000 7 8 10 11,000 10,000 9,000 11 12 13 14 8,000 7,000 6,000 15 16 5,000 4,000 17 18 3,000 19 2,000 20 1,000 Assuming MARR to be 10%, determine the following: a. Present worth b. Annual Worth c. Future Worth d. Internal rate of return e. External rate of retun f. Saving/investment ration g. Payback Period
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