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Suppose a Program Costs $100 with No Benefits in Year

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Suppose a program costs $100 with no benefits in year 0 and has net benefits of $40 for the next three years.With a discount rate of 6%, what is the program's present value?


Definitions:

Depreciation Estimates

Projections or calculations made regarding the decrease in value of tangible assets over time due to use, wear, or obsolescence.

Depreciation Method

A systematic approach to allocating the cost of a tangible asset over its useful life.

Fixed Assets

Fixed assets are long-term tangible assets intended for use in the production or supply of goods or services, not easily converted to cash within a year.

Residual Value

The estimated salvage value of an asset after its useful life is over.

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