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A project requires $10,000 as initial investment and will earn a revenue of $2,000 per year over the next seven years. The interest rate is
A project requires $10,000 as initial investment and will earn a revenue of $2,000 per year over the next seven years. The interest rate is 5% per year. What is the present worth of the project's Cost?
A)$1,573
B)$2,000
C)$8,681
D)$10,000
E)$11,573
I use Present worth = - First cost + Annual savings = - $10,000 + $2000 (P/A,5%, 7 years) = - 10,000 + 2,000(5.7786) = $1,573
The solution says D)$10,000 and I'm not sure why. Is it asking for, "what is the first cost"?
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