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Module2HWSol

# Module2HWSol - Chapter 2 Drill Problems 1(a The profit at...

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Chapter 2 Drill Problems 1(a) The profit at year 1 is computed as: \$50 𝐾 − \$2 𝐾 = \$48 𝐾 and the profit of the following years are computed in the same way. (d) The net cash flow for each year is computed by the following formula: For year 24: the profit is computed as: \$40, 000 1 + 0.024 20 \$10, 000 . The cash flow diagram is: (f) The net cash flow is computed for the following formula: The cash flow diagram is: \$48K \$48K \$48K \$48K \$48K 0 1 2 3 4 5 \$100K \$40,960 \$41,943 \$42,950 \$54,278 1 2 3 4 5 6 7 … … 24 -\$250K -\$250K -\$250K -\$250K

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(j) Application Problem 1. (a) The contract is evenly split for each year: (b) The contract is evenly split for each year: \$85,000 \$94,520 \$104,025 \$113,513 \$122,986 \$110,441 \$97,880 \$85,300 \$72,701 \$60,084 0 1 2 3 4 5 6 7 8 9 10 -\$500,000
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