Annual expenses are 40000 intially then decrease by 2000


An investment of 600,000 results in income of 200,000 per year for six years. Annual expenses are 40,000 intially, then decrease by 2000 each year beginning at the end of year two and continue decreasing through year six.

Salvage value at the end of year six is 250,000. MARR = 10%

a) Draw the cash flow diagram.

b) what is the simple payback?

c) what is the discounted payback?

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Financial Management: Annual expenses are 40000 intially then decrease by 2000
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