A manufacturing company makes $5,000,000 profit in the first year. If profits increase each year for 10 years (n = 10 years) by $2,000,000 annually, the company invest all its profit each year at 8% rate of return (i.e. interest rate), what is the present value?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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QUESTION 5
A manufacturing company makes $5,000,000 profit in
the first year. If profits increase each year for 10 years (n
= 10 years) by $2,000,000 annually, the company invest
all its profit each year at 8% rate of return (i.e. interest
rate), what is the present value?
Transcribed Image Text:QUESTION 5 A manufacturing company makes $5,000,000 profit in the first year. If profits increase each year for 10 years (n = 10 years) by $2,000,000 annually, the company invest all its profit each year at 8% rate of return (i.e. interest rate), what is the present value?
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