By filling carbon nanotubes with miniscule wires made of iro

By filling carbon nanotubes with miniscule wires made of iron and iron carbide, incredibly thin nano wires could be extruded by blasting the carbon nanotubes with an electron beam. If Gentech Technologies spends $2.7 million now in developing the process, how much would the company have to receive in licensing fees 3 years from now to recover its investment at 20% per year interest?

Solution

Given, P = 2,700,000

           n= 3 years

           i = 20%

Then, F = P(F/P, i, n)

           = $2,700,000(F/P, 20%, 3)

           = $2,700,000(1.728)

           = $4,665,600

Therefore, the company have to receive $4,665,600 as licensing fee after 3 years from now.