Question

& JE Your job break even or The variable co 3. Jefferson City has decided to build a downtown parking garage to house employee's vehicles. Since the city has to demolish several buildings on the site the project will take five years to complete. The city expects to save $30,000.00 a year once the project is completed. Using a 5% discount rate, determine the present value (PV) of the $30,000.00 savings at the end of the five year period. A. If the city s city need to se If the city

Answer 1

PV of perpetual CF = Perpetual CF/(interest rate-growth rate)

PV of perpetual CF = 30000/(0.05-0)

PV of perpetual CF = 600000