The profit that Johnny got from selling fish have increased at a constant rate of P1100 in each of the last 3 years. If this year’s profit (end of year 1) is expected to be P6000 and the profit trend continues through year 5, a.) Draw a cash flow diagram b.) what will the profit be at the end of year 5 c.) what is the present worth of the profit at an interest rate of 8% per year?
The profit that Johnny got from selling fish have increased at a constant rate of P1100 in each of the last 3 years. If this year’s profit (end of year 1) is expected to be P6000 and the profit trend continues through year 5, a.) Draw a cash flow diagram b.) what will the profit be at the end of year 5 c.) what is the present worth of the profit at an interest rate of 8% per year?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The profit that Johnny got from selling fish have increased at a constant
rate of P1100 in each of the last 3 years. If this year’s profit (end of year 1) is expected to be P6000
and the profit trend continues through year 5,
a.) Draw a cash flow diagram
b.) what will the profit be at the end of year 5
c.) what is the present worth of the profit at an interest rate of 8% per year?
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