e355t1q1

# e355t1q1 - E355-Spring08-Test1-Sol 1.1a Dr Merino invested...

This preview shows pages 1–2. Sign up to view the full content.

E355-Spring08-Test1-Sol 1.1a) Draw the cash flow diagram. [2 point] Dr. Merino invested in new building in Hoboken 15 years ago. The building was purchased for \$7M and in its first year of use, \$500K was spent on maintenance, and this maintenance cost increased by \$10K each year until today. Moreover, an important part of the purchased building had to be replaced 8 year after the purchase (year 8) and the value came out to be \$350K. Dr. Merino has just sold the building for \$ 2M as per high market rate. \$ 7M A Maintenance = \$500K G = \$10K \$ 2M \$350K -15 -12 -10 -9 -7 -3 -2 -1 0 - 14 - 13 -11 -8 -6 -4 -5 E355-Spring08-Test1-Sol Page 1 of 5 3/3/2008

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
E355-Spring08-Test1-Sol
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 2

e355t1q1 - E355-Spring08-Test1-Sol 1.1a Dr Merino invested...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online