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1. If a small electric company is purchased now for $50,000 it will lose $5,000 each year for the first 4 years. An additional investment
1. If a small electric company is purchased now for $50,000 it will lose $5,000 each year for the first 4 years. An additional investment of $30,000 at the end of the fourth year will result to a yearly profit of $25,000 from the end of the fifth year through the end of tenth year. Also, on the end of the tenth year the company can be sold for $30,000. If MARR is set at 20% compounded annually, will you buy the company? Use PW and IRR methods. (20 points)
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