Annuity problem

yume

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Joined
May 1, 2015
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4
Hi!

I have this problem

A factory can be purchased in $ 1 million, factory produces 2000 units a month a certain item that will be sold during the first six months the unit $30 and unit $50 over the next six months .
The investor thinks he can sell the factory at the end of a year in the sum of 1.2 million. If the investor usually wins in all business 5 % per month , I would advise buying the factory?

answer is: yes, 'cause today income is 1351502.28 and expenses are 1 million

My attempt:
i obtain that in the first 6 months they gain 360000 and in another 6 months they gain 600000
trying to solve for perpetual annuity i obtain that gain is 19200000
vp=360000/0.05 + 6000/0.05
which is really far from real answer

what i'm doing wrong?
 
I have edited the question below, reflecting what I think is the intended meaning:

A factory can be purchased for $1 million. The factory historically has produced 2,000 units per month of a certain item. The entire production of that item is expected to be sold. During the first six months (after purchase of the factory), the item is expected to sell for a price of $30 per unit; during the following six months, the per-unit price is expected to by $50.

The investor thinks he can sell the factory at the end of a year's time for the sum of $1.2 million. If the investor usually wins in all business 5% per month, would you advise that he buy the factory?
Please confirm or correct my edits. When you reply, please explain the bolded portion (in blue), as I can't figure out what is meant by "winning" in this context.

Thank you! ;)
 
Hi!

I guess all your changes are correct (sorry my disorganized english)

The blue portion is a pretty way to say that the interest rate used in this problem is 5% effective monthly
 
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