Question

An investment costs $58,462 and offers a return of 12 percent annually for twelve years. What...

An investment costs $58,462 and offers a return of 12 percent annually for twelve years. What are the annual cash inflows anticipated from this investment? Use Appendix D to answer the question. Round your answer to the nearest dollar.

Appendix D

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Answer #1

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

58,462=Annuity[1-(1.12)^-12]/0.12

58,462=Annuity*6.194

Annuity=58,462/6.194

=$9438(Approx).

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