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14. a. At the beginning of her freshman year, Maddie decided to start a small business in her apartment. She bought a small all-purpose copy
14. a. At the beginning of her freshman year, Maddie decided to start a small business in her apartment. She bought a small all-purpose copy machine for $4,000. With the help of her roommates, she got two projects. Project 1 will pay her $3,000 in year 1 and project 2 will pay $5,000 in year 2. She will not do any project in year three but rather do a routine equipment maintenance of $700. She plans to sell the machine after the routine maintenance at the end of year 4 for its salvage value of $750. Draw the cash flow diagram (CFD) for Nicole's business. Assume an interest rate of 10%. [1 am particularly interested in the direction of your arrows] b. G D 8 10 15 i% The plan is to calculate the equivalent amount at different time points. Example P = A(P/f ,1,1) Complete the following equivalencies [Note that there is nothing like A/B or C/G. The variables at stake ahere ar P and F only) A= DC is ) B= AC is ). C= G( i ) D= PC is ) C= AC i)
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