A major electronics manufacturer expects to generate additional revenue from its
ID: 2506795 • Letter: A
Question
A major electronics manufacturer expects to generate additional revenue from its recently won government contract. The company forecasts that the revenue will be $101,000,000 in the first year, but will decline by $2,000,000 every year for the next 3 years. What is the present worth of total revenue at an interest rate of 18% per year?A major electronics manufacturer expects to generate additional revenue from its recently won government contract. The company forecasts that the revenue will be $101,000,000 in the first year, but will decline by $2,000,000 every year for the next 3 years. What is the present worth of total revenue at an interest rate of 18% per year?
Explanation / Answer
present worth = total revenue-initial
= 165560000-101000000 = 64560000