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You can buy a machine for 100
You can buy a machine for 100.000 TL that will produce a net income of 30.000 TL per year for four years. If you decide to sell the machine at the end of 4 years, what should be the resale value in order to recover your money if interest rate is 15% per year? (What is the equivalent Future value of the 100.000 TL Initial machine cost and 30,000 TL annual revenues for 4 years until the end of year 4?). a) 60000 b) 124966 C) 136456 d) 25098 e) 146350 Bo? b?rak
Expert Solution
Solution:
Option -d
Future worth = -100000(F/P, 15%, 4) + 30000(F/A, 15%, 4)
= -100000*1.749006 + 30000*4.99338
= 25099
The resale value should be at least 25099 which is nearest to 25098
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