# I need desperate HELP, Finance question: "Suppose a factory costs $840,000...." #### iNeedMathHelpLol ##### New member Suppose a factory costs$840,000. You reckon that it will produce an inflow after operating costs of $174,000 a year for 14 years. 1. If the opportunity cost of capital is 10%, what is the net present value of the factory? 2. What will the factory be worth at the end of seven years? #### HallsofIvy ##### Elite Member How much principle would you have to have so that, investing it at 10% per year, you would bring in as much money as the factory will earn? #### Denis ##### Senior Member You need to use the present value of an annuity formula: p = a(1 - k) / r where k = 1 / (1 + r)^n a = 174000 n = 14 r = .10 : assumes rate is 10% cpd. annually p = ? Same thing for part 2, except n = 7 Your teacher gave the class that problem and did not give the formula? #### iNeedMathHelpLol ##### New member You need to use the present value of an annuity formula: p = a(1 - k) / r where k = 1 / (1 + r)^n a = 174000 n = 14 r = .10 : assumes rate is 10% cpd. annually p = ? Same thing for part 2, except n = 7 Your teacher gave the class that problem and did not give the formula? Nope, can you please explain it for me? Usually if I see the answer I can reverse learn it and get it down pat. Thanks #### Denis ##### Senior Member This is not a classroom; go read up: Anyway, seems to be something wrong with the problem statement: as far as I can tell, the given cost of$840,000 is not required.
What d'you think Halls?

#### iNeedMathHelpLol

##### New member
This is not a classroom; go read up:

Anyway, seems to be something wrong with the problem statement:
as far as I can tell, the given cost of \$840,000 is not required.
What d'you think Halls?

Okay, Can you delete the thread? Thanks

#### Denis

##### Senior Member
Threads not deleted here.
May we ask you to come back when you find out what the
given solution is and post it: may help someone else; thank you.