We are investing in a maintenance project that will increase annual revenues by $10,000 over ten years.
a) What is the present value of those revenues, if the project is financed at 7% interest, compounded annually? What will the future worth of those revenues be at the end of a five-year period?
b) What would the future worth of those same revenues be if over the period of five years the revenue increases by 10%, assuming the same interest rate of 7%?
c) If the investment made increases costs by $1,000 in the first year, increasing $200 annually over the period of ten years, what is the present worth of these costs?