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A manufacturing company pays at the end of every year $10 from royalties for unit produced...

A manufacturing company pays at the end of every year $10 from royalties for unit produced during the year. The patent will be active for five years. It is known that the estimated production of the next five years will be of 20000, 22000, 24000, 26000 and 28000. If the company decides to pay right now the royalties for the next five years, how much will they have to pay if discount rate is 25%?

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Answer #1

At a discount rate of 25%, the company will have to pay $521,926.4 now.

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