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Question: Your uncle almost convinced you to invest in his peach farm. It would require a $10,000 initial i...

Show transcribed image text Your uncle almost convinced you to invest in his peach farm. It would require a $10,000 initial investment on your part. He promises you revenue (before expenses) of $1, 800 per year the first year, and increasing by $100/year thereafter. Your share of the estimated annual expenses is $500. You figure you would invest for 6 years. Your uncle has promised to buy out your share of the business at that time for $12,000at which point you would use it to buy a new car). You have decided to set a personal MARR of 15% per year. Draw cash flow diagram from your point of view. Evaluate the investment using the PW method.

Your uncle almost convinced you to invest in his peach farm. It would require a $10,000 initial investment on your part. He promises you revenue (before expenses) of $1, 800 per year the first year, and increasing by $100/year thereafter. Your share of the estimated annual expenses is $500. You figure you would invest for 6 years. Your uncle has promised to buy out your share of the business at that time for $12,000at which point you would use it to buy a new car). You have decided to set a personal MARR of 15% per year. Draw cash flow diagram from your point of view. Evaluate the investment using the PW method.