Suppose You Wish to Purchase a Mine That Will Yield

question 147

Short Answer

Suppose you wish to purchase a mine that will yield an annual return of $32,000 for 12 years,after which the mine will have no value.You want to earn 8% annually on this investment and also set up a sinking fund to replace the purchase price.If money is placed in the fund at the end of each year and earns 6.2% compounded annually,how much should you pay for the mine?

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