a firm has installed amnufacturing line for packaging materials the firm plans t

Question

a firm has installed amnufacturing line for packaging materials the firm plans to produce 50 tons of packing peanuts at $5000 per ton annually for 4 years and than 80 tons of packing peanuts per year at $ 5500 per ton for the next 6 years what is the present worth of the expected income ? The firm's interest rate is 18% pear year. a firm has installed amnufacturing line for packaging materials the firm plans to produce 50 tons of packing peanuts at $5000 per ton annually for 4 years and than 80 tons of packing peanuts per year at $ 5500 per ton for the next 6 years what is the present worth of the expected income ? The firm's interest rate is 18% pear year.

Explanation / Answer

Hi,

Please find the detailed answer as follows;

Present Worth = (50*5000)/(1+.18)^1 + (50*5000)/(1+.18)^2 + (50*5000)/(1+.18)^3 + (50*5000)/(1+.18)^4 + (80*5500)/(1+.18)^5 + (80*5500)/(1+.18)^6 + (80*5500)/(1+.18)^7 + (80*5500)/(1+.18)^8 + (80*5500)/(1+.18)^9 + (80*5500)/(1+.18)^10 = $1466286.23

Answer is $1466286.23.

Thanks.

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