Determine the present worth in year of the costs
Microeconomics
1. Calculate the annual worth (years 1 through 7) of Merchant Trucking
Company’s cash flow. Use an interest rate of 10% per year.
Year 0 1 2 3 4 5 6 7 Cash Flow, $ millions 450 -40 200 200 200 200 200 200.
2. The by-product department of Iowa Packing utilizes a cooker that has the
cost stream shown. Determine the present worth in year 0 of the costs at an
interest rate of 10% per year.
Year Cost ($1000)
0 850
1 300
2 400
3 400
4 400
5 500
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