You inherited an oil well that will pay you $25,000 per year for 25 years, with the payments being made at the beginning of each year. If you think a fair return on the well is 7.5%, how much should you ask for it if you decide to sell it?

The answer is $299,574.17

Explanation:

Present value of annuity due = P + P [(1-(1+i)^-n-1)/i]

PV = 25000 + 25000[1- (1.075)^-24) / 0.075]= $299,574.17

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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