What is the maximum amount you would pay for an asset that generates an income of...
What is the maximum amount you would pay for an asset
that generates an income of $250,000 at the end of each of five
years, if the opportunity cost of using funds is 8 percent?
Do not round intermediate calculations. Round only your final
calculations to the nearest penny( two decimal places). Use a
negative sign (-) where appropriate.
Homework Answers
ANSWER:
I = 8%
N = 5
INCOME = $250,000
Pv = income(p/a,i,n) = 250,000(p/a,8%,5) = 250,000 * 3.993 = $998,250
so the maximum amount that i would pay for the asset is $998,250
Add Answer to:
What is the maximum amount you would pay for an asset
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