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Gnasher, Inc. bought a new company as an investment. The company is anticipated to have an annual profit of $109397 for a minimum of 27 years.

Gnasher will also receive revenue from the company through licensing fees, which will begin at the end of year 8. The licensing fee revenue is anticipated to initially be $27150, which will increase by 7% each subsequent year. Gnasher will receive the licensing revenue for 10 years.

If Gnasher is able to deposit the profit and the licensing revenue in an account paying 7%, compounded annually, how much would Gnasher have in the account at the end of the 27 years?

Note: Gnasher will receive the first year of profit at the end of year 1 and the last year at the end of year 27 Gnasher will receive the first year of licensing fee revenue at the end of year 8. The licensing fee revenue will only be received for a short time in the middle of the CFD.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92682864

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