Question

Consider the following investment project. Calculate the net future worth of this investment at 11​% and determine the acceptability of the investment.

Consider the following investment project. Calculate the net future worth of this investment at 1 1% and determine the acceptability of the investment. 0 $77,000 17,300 18,300 31,500 31,500 19,000 4 Click the icon to view the interest factors for discrete compounding when 11% per year. The net future worth of this investment will be sthousand. (Round to one decimal place.)

Answer 1

FW = -77,000(F/P, 11%, 5) + 17,300(F/P, 11%, 4) + 18,300(F/P, 11%, 3) + 31,500(F/P, 11%, 2) + 31,500(F/P, 11%, 1) + 19,000

= -77,000(1.685) + 17,300(1.518) + 18,300(1.368) + 31,500(1.232) + 31,500(1.110) + 19,000

= -129,745 + 26,261.4 + 25,034.4 + 38,808 + 34,965 + 19,000

= $14,323.8

Since FW is positive, the investment is acceptable.