Marty owns a travel agency and is considering the purchase of a flux capacitor. Owning the capacitor will enable Marty to earn $100,000 per year selling trips through time. Marty plans to hold on to the capacitor for three years. He estimates that at the end of three years, he will be able to resell the flux capacitor for $250,000.
If the flux capacitor is priced at $475,000, and interest rates are 7%, calculate the net present value of the investment. (Round your answer to the nearest dollar.)
| A. |
| B. |
| C. |
| D. |
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
End of dialog window.
This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.
This is a modal window.
Is the flux capacitor a wise investment for Marty? Explain.
| A. |
| B. |
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
End of dialog window.
This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.
This is a modal window.