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Kunkle Company wishes to earn 8% annually on its investments. If Kunkle makes an investment that...

Kunkle Company wishes to earn 8% annually on its investments. If Kunkle makes an investment that equals or exceeds that rate, it considers it a success. Assume that Kunkle invests $2.6 million and gets $520,000 in return at the end of each year for X years. What is the minimum value of X (number of years) for which Kunkle will consider the investment a success? Assume that Kunkle can't invest for fractional parts of a year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

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Answer #1

rate positively ..

We have to use financial calculator to solve this
put in calculator
FV 0
PV        (2,600,000)
PMT 520000
I 8%
compute N                      6.6
Therefore it will take 7 year to get the success in the investment.
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