TFS · Practice Exam 2 · Problem 3 PDF Solution in PDF ↓
TFS · Practice Exam 2 · Problem 3
Problem & Solution
PDF: Practice Exam #2-03.pdf
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  • - Problem: A company with a tax rate of 30% makes a $50,000 one-time purchase that drives 8,000 of annual revenue and carries 1,200 of annual maintenance costs.
  • - Approach: We've got some initial upfront cost of 50k, which when we use that in the equations, all regard that as negative, but suffice it to say for the cash flow diagram that that arrow is...
  • - Key values: 30 %, 6 %, 0.3 %, 000 in
  • - Reference: look up
  • - Result: And that gives us a present value of negative, because this initial term is small enough that it drags the whole thing down to negative $12,174, which...
  • - ✅ Answer: A
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MPEP OH Prep Dashboard Problem 3 · Practice Exam 2 PDF-Embedded Format