A company invests $6,250 at the beginning ofa seven-year project. At the end of every year forthe first five years, the project generates $1,550. Atthe end of the sixth year, the project generates nomoney. At the end of the seventh year, the project isterminated. How much must the project generate atthe end of the seventh year to realize 14% return onthe initial investment?
A company invests $6,250 at the beginning ofa seven-year project. At the end of every year forthe first five years, the project generates $1,550. Atthe end of the sixth year, the project generates nomoney. At the end of the seventh year, the project isterminated. How much must the project generate atthe end of the seventh year to realize 14% return onthe initial investment?
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 12P
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A company invests $6,250 at the beginning of
a seven-year project. At the end of every year for
the first five years, the project generates $1,550. At
the end of the sixth year, the project generates no
money. At the end of the seventh year, the project is
terminated. How much must the project generate at
the end of the seventh year to realize 14% return on
the initial investment?
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