Suppose you wish to purchase a factory that will yield an annual return of $12,000 for 12 years,after which the factory will have no value.You want to earn 8.25% annually on your 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 4.2% compounded annually,how much should you pay for the factory?

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The Answer of Suppose you wish to purchase a factory that will yield an annual return of $12,000 for 12 years,after which the factory will have no value.You want to earn 8.25% annually on your 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 4.2% compounded annually,how much should you pay for the factory?

Suppose You Wish to Purchase a Factory That Will Yield