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Consider an asset with upfront cost of $39,865. The net revenue associated with it...

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Accounting

Consider an asset with upfront cost of $39,865.

The net revenue associated with it during the first year of operation is $15,695.

The net revenue associated with it during the second year of operation is $8,620.

The net revenue associated with it during the third year of operation is $10,397.

With an interest rate of 0.067, what is a levelized net revenue payment payable at the end of years 1, 2 and 3, which has the same present value as the actual net revenue stream at the end of period 0.

The annuity formula for an interest rate of 0.067 and three payments is given by

(11(1+))=(1(1+))

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