How much would the company need to pay payments equivalent

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Assignment:

Limitless Ltd. is planning to buy a new warehouse to store its production output. The investment would require £500,000 to be paid upfront. Thanks to the new warehouse, the company expects to increase its profits by £120,000 annually for the next five years, and then £60,000 for the following five years. Suppose that, instead of paying the initial £500,000 now, Limitless Ltd. decides to pay it in equal instalments over the next 10 years.

How much would the company need to pay each year to make all these payments equivalent to £500,000 today?

Reference no: EM133437472

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