Question
Provide the meaning of the following. (i) Amortization (ii) Present value b) A departmental store advertises goods at K7000 deposit and 3 further equal annual
Provide the meaning of the following. (i) Amortization (ii) Present value b) A departmental store advertises goods at K7000 deposit and 3 further equal annual payments of K5000. If the discount rate is 8%, calculate the present value of the goods. c) A business project is being considered which requires 24000 initial capital outlay. Net revenues over the following 4 years of K8000, K7000, K5000 and K6500 respectively. Calculate the payback period and state whether the project is worthwhile if the expected payback period is three years or less.
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