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The time zero initial investment of $55,000 and a year one investment of $45,000 in project A generate incomes of $30,000 per year for year
The time zero initial investment of $55,000 and a year one investment of $45,000 in project A generate incomes of $30,000 per year for year two through ten with zero salvage. For a 12.0% minimum discount rate, determine investment net value on present, annual and future basis. Then analyze the effect on net value from including reinvestment of revenues at the 12.0% minimum discount rate in the net value analyses. Refer to revenue reinvestment at 12.0% as project B.
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