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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
An engineering company needs to decide whether or not to build a new factory. The costs of building the factory are $150 million initially, together with a further $100 million at the end of the next 2 years. Annual operating costs are $5 million commencing at the end of the third year. Annual revenue is predicted to be $50 million commencing at the end of the third year. If the interest rate is 6% compounded annually, find
(a) the present value of the building costs
(b) the present value of the operating costs at the end of n years (n > 2)
(c) the present value of the revenue after n years (n > 2) (d) the minimum value of n for which the net present value is positive
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