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FIN 341 Fall 2021 Principles of Finance Question 19, P 4-41 (sim... Part 1 of 3 HW Score: 58.89%, 26.5 of 45 points O
FIN 341 Fall 2021 Principles of Finance Question 19, P 4-41 (sim... Part 1 of 3 HW Score: 58.89%, 26.5 of 45 points O Points: 0 of 1 TIT Save have You are thinking of making an investment in a new factory. The factory will generate revenues of $1,080,000 per year for as long as you maintain it. You expect that the maintenance costs will start at $63,720 per year and will increase 5% per year thereafter. Assume that all revenue and maintenance costs occur at the end of the year. You intend to run the factory as long as it continues to make a positive cash flow (as long as the cash generated by the plant exceeds the maintenance costs). The factory can be built and become operational immediately and the interest rate is 6% per year. a. What is the present value of the revenues? b. What is the present value of the maintenance costs? c. If the plant costs $10,800,000 to build, should you invest in the factory? a. What is the present value of the revenues? The present value of the revenues is $ . (Round to the nearest dollar.) xt thre king at fina per
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