Answer to Question #214720 in Economics for ahmad ali

Question

Before evaluating the economic merits of a proposed investment, the XYZ Corporation insists that its engineers develop a cash-flow diagram of the proposal. An investment of $10,000 can be made that will produce uniform annual revenue of $5,310 for five years and then have a market (recovery) value of $2,000 at the end of year (EOY) five. Annual expenses will be $3,000 at the end of each year for operating and maintaining the project.

Draw a cash-flow diagram for the five-year life of the project. Use the corporation’s viewpoint.

Answer 1

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