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Initial investment My family is considering starting a hotel but currently there is no enough money to do so therefore the family now has to decide how much to invest in order to achieve their goal. The family considers an investment with an initial cost of $48000.the investment is expected to generate an even stream of cash flows for 12 years at a discounting rate(interest rate) of 5%.therefore the our family needs value of a future investment is similar to the formulae of finding the future value of a present amount. The two formulae’s are similar in that they are both used to adjust the cash flows for future time value of money. Also the two are similar in that they are computed the same way and they use the same value factor. The formula for finding the future value is given as FV=PV(1+i)n [...]
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Subject Area: Mathematics
Document Type: Dissertation Proposal
