How much money can a production company that makes fluidized bed scrubbers spend now instead of spending $150,000 in year 5 if the interest rates are estimated to be 10% per year in years 1 to 3 and 12% per year in years 4 and 5?

What will be an ideal response?


P = 150,000(P/F,12%,2)(P/F,10%,3)
= 150,000(0.7972)(0.7513)
= $89,840

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What will be an ideal response?

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