Determine the equivalent present worth in year 0 (PT) of all of the cash flows at i = 18% per year. $25000 i = 18% g = 5%
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Step 1
To calculate the present worth of each cash flow, we need to use the formula: PW = CF / (1 + i)^n Where PW is the present worth, CF is the cash flow, i is the interest rate, and n is the number of years. For the first cash flow, we have: PW1 = 1200 / (1 + Show more…
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