7 Darnell Enterprises constructed an addition to its buildin

7 Darnell Enterprises constructed an addition to its building at a cost of $73,000. Extra annual expenses are expected to be $1850, but year? extra income will be $19,000 per year. How long will it take for the company to recover its investment at an interest rate of 10% per The time taken for the company to recover its investment is determined to be Choose the spreadsheet function that determines np a. Spreadsheet function:-NPER(1096, 17150,-73,000) displays 6 years b. Spreadsheet function: NPER(10%, 18,815,-73,000) displays 4 years c. a. Spreadsheet function: NPER(10%, 17,150,-19,000) displays 4 years d. a. Spreadsheet function:-NPER(10%, 18,815,-19,000) displays 6 years years The correct spreadsheet function is in option

Solution

Rate, r = 10%

Payment paid each period, pmt = (19000 - 1850) = $17150

Present Value of cost, PV = -$73000

Syntax

=NPER(rate, PMT, PV,Type)

=NPER(10%,17150,-73000)

= 5.82 years

= 6 years (Approximately)