A start-up internet service provider expects to lose money in each of the first four years. Losses are projected to be $50 million in year one, $40 million in year two, $30 million in year three and $5 million in year four. An interest rate of 10% per year is used.
a. calculate the present worth of the losses for the first three years.
b. calculate the present worth of the losses for all four years.
c. what is the equivalent uniform annual worth of the losses through year four?
d. in order to recover the losses by the end of year nine, what should the company's equivalent uniform annual profit in years five through nine be?