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Problem 5: (20%) A plant bire firm purchases an excavator for the sum of $15000. For five years the excavator is hired out to contractors
Problem 5: (20%) A plant bire firm purchases an excavator for the sum of $15000. For five years the excavator is hired out to contractors and the total receipts are those shown in teble 1 . "After five years, the plant hire company decides to recondition the excavator at a cost of $500 and to sell it for the sum of $2000. Knowing that the interest rete is 8% and inflation rat 1. draw the project cash flow 2. calculate the net present value 3. what is the payback period Problem 5: (20%) A plant bire firm purchases an excavator for the sum of $15000. For five years the excavator is hired out to contractors and the total receipts are those shown in teble 1 . "After five years, the plant hire company decides to recondition the excavator at a cost of $500 and to sell it for the sum of $2000. Knowing that the interest rete is 8% and inflation rat 1. draw the project cash flow 2. calculate the net present value 3. what is the payback period
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