Scrap value after eight years

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Jane is considering becoming an Uber taxi driver. She plans to buy an electric car, keep it for eight years and then replace it. Luckily for her, the party We Hate Donald (WHD) just won the federal election in Australia and decided to give a 60% discount on electric cars this year. Assume that the price of a car before the discount is $60,000, the electric car generates a free cash flow of $12,000 annually, the scrap value after eight years is 0 and the interest rate is 7% p.a.

The value of CCR using the perpetuity method is closest to?

Reference no: EM132548158

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