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The maintenance cost for an investment is $2,000 per year for the first 10 years and $1,000 per year thereafter. The investment has infinite life.

The maintenance cost for an investment is $2,000 per year for the first 10 years and $1,000 per year thereafter. The investment has infinite life. With a 10% interest rate, what is the present worth of the annual disbursements? The answer is $16,144.60. How do we get this?
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Dear Student, Please... View the full answer

8437107.xlsx

SOLUTION:
Present Value of $2,000 per year:
PMT
Future Value
Rate
Nper $2,000.00
$10.00%
10.00 Using excel formula,
Present Value $12,289.13 Present Value of $1,000 = ($1,000 / 10%) * PVF @ 10%, 10...

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