Net revenues at an older manufacturing plant will be $2 million
this year. The net revenue...
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Net revenues at an older manufacturing plant will be $2 millionthis year. The net revenue will decrease by 15% per year for 5years, when the assembly plant will be closed (at the end of year6). If the firm's interest rate is 10%, calculate the PW of therevenue stream. Use excel functions and a table.
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4.2 Ratings (675 Votes)
Year
Cash flow
Present Value
PW
1
2000
0.9091
1,818
2
1700
0.8262
1,405
2000-(2000*15%)
3
1445
0.7513
1,086
1700-(1700*15%)
4
1228
0.683
839
1445-(1445*15%)
5
1044
0.6209
648
1228-(1228*15%)
6
887
0.5645
501
1044-(1044*15%)
Total
PW
6,296
PW
6.296 million
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