PROBLEM 2 Vision technologies Inc is a small company that us

PROBLEM 2 Vision technologies, Inc., is a small company that uses ultra-wideband technology to develop devices that can detect objects (including people) inside buildings, behind walls, or below ground. The company expects to spend $100,000 per year for labor and $125,000 per year for supplies for three years before a product can be marketed. At an interest rate of 15% per year, what is the total equivalent present worth of the company\'s expenses?

Solution

Total equivalent present worth value = FV x [ 1+i]^-n

FV = Future value spent

n = 3yrs

i = 15% = 0.15

FV = 100000+125000 = 225000$

Total equivalent present worth value = 225000 x [ 1+0.15]^-3

Total equivalent present worth value = 147941.153$