Using the given slides and questions, solve for the results.

Suppose you are purchasing a tank for your construction business - The tank has a 10 year life expectancy - Purchasing the tank will cost $1.2 million - You are expecting to earn $150,000 per year for the period of life expectancy by leasing the tank - Interest rate is expected to be constant 3% 1. Determine the present value (P). 2. Should you make this investment? From the convergence of geometric series, Present Value (P) = P + PA+P3 + ... +P + = AR + AR + ... + AR = AR (1+R+ R2 + ... + AK ) = = AR&k=0 Rk 1-R = AR 1-R + an-1 - + ar + ar2 + a3 + 1 - 2. = :* = n-1 1- =0