TCO 7 ZXY is going ahead on an expansion project It will be

(TCO 7) ZXY is going ahead on an expansion project. It will be able to earn $500 per hour and run 4,000 hours per year. What is the net present value for the next 7 years with an interest rate of 6%? (Points : 15)

Solution

the income per day = $500

income per annum= 500*4000= $2,000,000

the discount rate= 6% and time period is 7 years.

the present value of the money is= 2,000,000*4.9173

= $9,834,600