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The Swell Computer Company Has Developed a New Line of Desktop

question 69

Essay

The Swell Computer Company has developed a new line of desktop computers. It is estimated that the cash returns generated by the new product line will be $800,000 per year for the next five years, and then $500,000 per year for 3 years after that (the cash returns occur at the end of each year). At a 9% interest rate, what is the present value of these cash returns?


Definitions:

Organic Product

A compound or substance that is the result of an organic chemical reaction.

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