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Assume that the discount rate is 15 percent. How much can be paid for a machine that generates an annual cash inflow of RM 50,000
- Assume that the discount rate is 15 percent. How much can be paid for a machine that generates an annual cash inflow of RM 50,000 for 8 years?
(5 marks
- You are negotiating with the government the right to mine 5,000 tons of manganese ore per year for 20 years. The current price per ton ofmanganese ore is RM 105 000 and it is expected to increase at the rate of 5 percent per year.
Assuming that the discount rate is 15 percent, calculate the present value of the manganese ore that you can mine.
(15 marks)
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