Calculate the present worth of the investment

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Reference no: EM131002445

A textile firm in Argentina proposes you an investment for a period of 5 years. The initial investment is 100,000, the expenses for the first year are $10,000 (then-current) and will increase (due to usage of equipment) at rate of 10% per year. The company is projecting to have an income expressed in then-current dollars during the following five years of $25,000, $35,000, $45,000, $55,000, $(65,000. Using a MARR of 7% (real interest rate), and an inflation rate of 8%, calculate the present worth of the investment using then-current and current worth approach, and decide if you will invest in the project.

Reference no: EM131002445

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